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2010 Report
Of the
Incentive Review Committee
Submitted to:
The Honorable Mary Fallin
Governor of the State of Oklahoma
The Honorable Brian Bingman
President Pro Tempore
Oklahoma State Senate
The Honorable Kris Steele
Speaker
Oklahoma House of Representatives
The Honorable Jeffrey Hickman
Speaker Pro Tempore
Oklahoma House of Representatives
April 29, 2011Table of Contents
Cover Letter to the Governor, State Senate & House of Representatives……….. 3
I. Introduction & Committee Background…………………………………………….. 4
II. Incentives Reviewed in 2010
Insurance Premium Tax Credit………………………………………………... 5
Quality Jobs and Related Programs………………………………………….. 8
Other States Quality Jobs Type Programs and Relevant Matters………… 11
III. Principles of Sound Tax Incentives……………………………………………….. 12
IV. Committee Recommendations……………………………………………………. 14
Appendices:
Appendix A “Oklahoma Incentives List” ……………………………………………… 15
Appendix B “Other States Quality Jobs & Closing Fund Type Programs”……….. 23
Appendix C “Notes on Quality Jobs Program”…………………………………...….. 26
Appendix D “Quality Jobs Rebate Payments - 2010”……………………………….. 29
Appendix E “Credits Under Moratorium” …………………………………………….. 32
2 April 29, 2011
To: The Honorable Mary Fallin
Governor
The Honorable Brian Bingman
President Pro Tempore
Oklahoma State Senate
The Honorable Kris Steele
Speaker
Oklahoma House of Representatives
The Honorable Jeffrey Hickman
Speaker Pro Tempore
Oklahoma House of Representatives
Dear Governor Fallin, Senator Bingman and Representatives Steele and Hickman:
The Incentive Review Committee (IRC) has taken the charge delegated to the committee by Senate Bill 1516 enacted during the 2004 legislative session to select a specific tax type each year and conduct a thorough analysis of specific tax preferences within that tax.
In 2010, the committee studied several insurance premium tax credits and other incentive programs. In addition, the committee heard information from several individuals regarding the purposes and uses of these credits. The following report outlines the findings of the IRC.
Respectfully Submitted,
Douglas Branch
Bruce Crum
Robert Dauffenbach, Ph.D.
Jonathan Forman
Michael Laird
William Lohrey
Mark Snyder
Larkin Warner, Ph.D.
Don Wood
3 I. Introduction & Committee Background
In the summer of 2003, Governor Brad Henry convened the Economic Development Generating Excellence (EDGE) Commission to examine issues facing Oklahoma across the economic and political landscape and recommend a plan of action to address those issues. One of the recommendations of the team that was adopted into the formal EDGE Action Plan was as follows:
“Putting in place a system to quantify the costs and benefits of existing incentives and tax credits. The state should systematically quantify the costs and benefits of all current and proposed business incentives and tax credits to determine whether they effectively encourage the type of business behavior they seek to stimulate.”
As a result of this recommendation, the Oklahoma State Legislature enacted Senate Bill 1516 (SB1516) in the 2004 legislative session. SB1516 created the Incentive Review Committee (IRC) and charged it with conducting a review of existing tax incentives in Oklahoma. To this end, the bill directs the IRC to annually select a particular section of State tax code, and within that code to choose which incentives it will review in the given year. The review is required to include the following information.
1. An identification of the purpose of the tax incentive;
2. A determination of whether the potential revenue impact on the state can be quantified and if so, an estimate of the potential revenue impact on the state;
3. A determination of whether the economic gain to the state can be quantified and if so, an estimate of the economic gain measured in jobs, wages, investments, or other economic criteria;
4. An estimate of the effect on the distribution of the tax burden;
5. An estimate of the number of taxpayers receiving the benefit;
6. A determination of the growth potential of the industry eligible to claim the incentive;
7. A determination of the effectiveness in achieving the desired objective;
8. A determination of whether the tax incentive is the most fiscally effective means of achieving its stated purpose;
9. An analysis of the costs and burdens of administration;
10. An analysis of the competitive position of Oklahoma relative to other states with similar incentives;
11. A determination of the effectiveness of evoking a change in taxpayer behavior; and
12. A public hearing, at which persons receiving the incentives reviewed, or other interested parties, may testify.
4 II. Incentives Reviewed in 2010
During 2010, the IRC reviewed the following two incentives considering the 9 Principles of Sound Tax Incentives listed in Section III of this report when at all possible. Appendix A to this report is the committee’s list of Oklahoma Incentives.
1. Insurance Premium Tax Credit (36 O.S. §625.1)
The committee asked for data which reflect the various credits against the insurance premium tax. A report by the Oklahoma Insurance Department showed the following credits were made against the insurance premium tax for calendar years 2008 & 2009:
Oklahoma Insurance DepartmentPremium Tax Collections and CreditsCY 2008CY 2009Premium Tax Collected159,259,893162,705,426Refunds9,657,2397,312,869Net Premium Tax Collected149,602,654155,392,557Credits Taken PSA**3,031,5183,488,809 Flood**3,230,5873,870,639 Life Guaranty1,185,4651,365,066 P&C Guaranty9,963,1799,533,975 Coal10,149,0766,007,014 Home Office12,512,89314,673,798 Rural Business3,924,4304,850,061 Small Business8,215,7219,779,735 Historical Building Rehab4,654,42110,607,699 Venture Capital1,045,904414,300 Franchise Tax262931Total Credits Against Premium Tax57,913,45664,592,027** PSA and Flood Premiums are taken directly from Direct Written Premium prior to premium tax being assessed. Therefore, they are shown as the amount that premium tax collections are reduced by their use. PSA Premiums CY 2008 $134,734,138.22 *2.25% = $3,031,518 CY 2009 $155,058,189.62 *2.25% = $3,488,809Flood Premiums CY 2008 $143,581,665 *2.25% = $3,230,587 CY 2009 $172,028,393.94 *2.25% = $3,870,638.86Source: Oklahoma Insurance Department
5
More detailed descriptions for the credits taken against the Insurance Premium Tax are listed below:
A. Life and Health Guaranty Fund Credit (per 36 O.S. § 2030 (i))—This credit is 20% for 5 years per year of assessment made. There is no year limitation on this credit. The credit must be used or lost in the year given. Cannot be carried forward. In the event an insurance company should cease doing business, all the accumulative credit will be allowed in the year the company ceases doing business. If a merger occurs, then the credit will follow the succeeding insurance company. The Life Guaranty Association issues a disc or email to the financial division with the information each year around January 1st. The file will contain the amount of the credit allowed for that year by the company. This assessment is on all life, health and annuity companies. Some companies have annuities not assessed and are only charged a flat $150. The credit can be a refund or negative number. This will only be taken on the tax return and not during the year on estimated payments. It must come out first and prior to any other credit initiated. Must come before pension. Cannot be refunded.
B. Property and Casualty Guaranty Fund Credit (per 36 O.S. § 625.4)—This credit is from the P&C assessment made by the Guaranty Association each year. It is 10% of the base assessment by year for 10 years. There is no time limitation on this credit. This credit may be carried forward to the future years and needs to be tracked for the overage remaining. This credit can be transferred. A separate report will need to by queried and sent to the Association for the remaining credit not taken in the year granted. An email will be sent to the financial division each year around January 1st for downloading to the AS400. It will contain the exact amount of credit and/or refund. A refund or negative number will need to remain with the return and have taxes assessed. The amount of overage left will need to be added to next years’ number that comes from the association. A separate line will be needed under the assessment for carry-forward. This will only be taken on tax return and not during the year on estimated payments. It must come out first and prior to any other credit initiated after the life credit. Must come before pension. Cannot be refunded.
C. Small Business Capital Credit (per 68 O.S. § 2357.62)—A small business credit for qualified investments in small business beginning for taxable years after December 31, 1997 and before January 1, 2012. The credit comes from the tax imposed under 624 and 628, meaning annual premium tax reporting and retaliatory tax. The credit may be carried forward for a period not to exceed 3 taxable years. Any company claiming this 20% off cash investment reported on Form 526 from the tax commission must produce form 526. The credit must be claimed in the year received and carried forward. We have told companies in the past they may not deduct any amount from the items of fire marshal tax, retaliatory tax, and fees. This would be an exception allowed and would be entered against retaliatory. The credit must be claimed in the year received and carried forward. A report needs to be given to the tax commission. Cannot be refunded only carried forward. Taken before pension. Allowance of the credit as estimated payments will avoid refunds later, but the statute is silent.
D. Coal Credit (per 68 O.S. § 2357.11)—Credit is allowed from January 1, 1993 and ending on or before December 31, 2012. Any credit not used may be carried forward 5 years following the year of qualification. This credit can be used against annual taxes, as a prepayment, or against retaliatory taxes. These credits are purchased by the insurance companies from coal producing energy companies via a transfer through the tax commission. Form 572 will accompany any transfer of credit and must be submitted as proof. A report needs to be given to the tax commission. Cannot be refunded only carried forward. Taken before pension.
E. Historic Buildings Rehabilitation Credit (per 68 O.S. § 2357.41)—Can be taken against premium tax or retaliatory tax beginning December 31, 2000. No refund on credit.
6 The credit may be carried forward for 10 years following the qualified expenditures.
Credit is transferable for 5 years following expenditure. The tax commission will issue a form 572 as proof. We will allow the credit to be applied to estimated payments to avoid refunds although the statute is silent on this matter. Taken after pension.
F. Investments in Rural Small Business Capital Companies (per 68 O.S. § 2357.73)—Beginning December 31, 2000 and ending December 31, 2011 a credit for qualified investment in qualified rural small business capital companies will be allowed for tax imposed under 624 and 628, meaning annual premium tax and retaliatory tax. May be used towards quarterly tax payments. A form from the tax commission will accompany the return as proof. An amount equal to 30% of cash investment in a capital company. The credit may only be claimed in the year the company invests funds and transferred to others. The credit may be carried forward for a period not to exceed 3 years. Not refunded and taken before pension. A report needs to be sent to the tax commission annually.
G. Co-Investments in Rural Small Business Capital Companies (per 68 O.S. § 2357.74)—Same as Credit for Investments.
H. Home Office Credit (per 36 O.S. § 625.1)—This credit is for insurance companies that have established a home office in the state of Oklahoma. The qualifications can be found in the above referenced statute. The credit is based on number of full time employees and whether the insurance company is a foreign or domestic. This credit may only be taken at year end and after the pension of 57.1% is deducted and all other credits are deducted due to the statute stating it is only for monies actually paid to the General Revenue Fund of the state, not including tax monies placed in pension funds or in escrow. It may only be deducted against taxes imposed under 624 (premium tax). Foreign Companies having applied with the department and established a home office are eligible for a 15% credit for 200-299 employees; a 25% credit for 300-399 employees; a 35% for 400-499 employees; and a 50% credit for 500 plus employees. The credit is based on the tax due less the portion that belongs to the pension of 57.1% times the % allowed. (See Home Office Worksheet). Domestic companies are allowed 35% for 400-499 employees and 50% for 500 plus employees. A company may re-domesticate and keep its foreign deduction as in (A) of the statute. This is only for the tax year and may not be carried forward.
I. Venture Capital Credit (per 68 O.S. § 2357.74)—Credit from December 31, 2000 to December 31, 2011. This credit must follow all credits including the home office credit due to it being 100% of the credit after all other credits per the above statute. It may be carried forward for a period not to exceed 3 taxable years. Must be deducted after the pension fund of 57.1%. Tax Commission will provide a form for proof of credit.
J. PSA (Public Service Authority) Credit (per 36 O.S. § 624 (A-2)—This credit is taken directly from premium written and is not a tax credit, but rather a direct premium written credit. 100% of all premiums written for a public service authority (with proof by listing the amount, name, address, contact person, and phone number of the PSA). A PSA is any county, city, town, school district, or authorities performing a public service under Title 74: 1001-1008 and Title 60: 176-180.4.
K. Flood (Crop & Flood) Credit - Federal credit
Source: OK Insurance Department
7 2. Quality Jobs and Related Programs
The committee heard a presentation from the Oklahoma Department of Commerce on the Quality Jobs, Small Employer Quality Jobs and 21st Century Quality Jobs programs. The committee also reviewed the March 2011 Triennial Reports of the Oklahoma Department of Commerce on the Quality Jobs and 21st Century Quality Jobs programs. Below is a summary of these programs.
Quality Jobs:
Overview:
The Quality Jobs Program serves as an incentive to businesses to expand or locate within Oklahoma and create new taxable payroll within the state. Participants may qualify for a cash rebate of up to 5% over a ten-year period on new taxable payroll.
Purpose:
• Creation of jobs in targeted and higher wage industries
• Designed to fulfill the overarching economic development goal of raising the living standards of the state’s citizens
In FY 2009, the Oklahoma Quality Jobs Program rebates totaled $60,548,225 as compared to $63,339,981 in 2008. The breakdown is as follows:
Application Process:
1. Sales Phase
a. Visit with Prospect
b. Complete Incentive Analysis Request (IAR) Form and deliver completed to Business Location or Business Solutions Division
c. Ensure Project is entered in Customer Relationship Management DataBase (CRM) and deliver to Research & Policy Division
d. Research & Policy Division generates Incentive Analysis (Marketing Version) and returns to Business Location or Business Solutions
e. Deliver and discuss options with prospect or existing company advising where needed
f. If accepted, begin Step 2. If not accepted, return to Step 1a.
8
Program
FY 2008
FY 2009
Quality Jobs
$62,080,930
$59,071,458
Small Employer Quality Jobs
$1,259,051
$1,476,767
21st Century Quality Jobs (New 2009)
$0
$0
Totals
$63,339,981
$60,548,225
Source: Oklahoma Department of Commerce 2. Application/Info Gathering Phase (In-State Company)
a. Business Location or Business Solutions Division provides application and written process overview to the company helping them initiate and submit signed application. Date stamp and create protected E-file with all documents related to application.
b. Work with company to gather required information and submit to e-file (using checklist)
c. Certify to Quality Jobs Division that all documents and information are complete and accurate. Formally introduce QJ Division contact who reviews checklist and determines if all documents are complete.
d. If complete, begin Step 3. If not complete, return to Step 2b.
Application/Info Gathering Phase (Out-of-State Company)
e. Provide application and written process overview to the company; Hand-off to Quality Jobs Division in formal introduction.
f. Quality Jobs Division initiates and submits signed application with date stamp an protected E-file (containing all documents related to the application)
g. Quality Jobs Division works with company to gather required information and submits the e-file (using checklist)
h. Quality Jobs Division reviews checklist and determines if all documents are complete and accurate.
i. If complete, begin Step 3. If not complete, return to Step 2g.
3. Commerce Review Team (CRT) Review Phase
a. Research & Policy Division generates final, complete incentive analysis; Hand-off to Quality Jobs Division
b. Quality Jobs Division validates application & supporting documents providing feedback to company and Quality Jobs Representative via e-mail; then provides E-packet via Virtual CRT to Business Location or Business Solutions Division.
c. General Counsel, Quality Jobs and Research & Policy Divisions also review E-packet via Virtual CRT.
d. CRT issues are received and resolved by all divisions
e. CRT meeting is scheduled, convened and held (Step 4)
4. Contracting Phase
a. Quality Jobs Division prepares minutes and documentation. General Counsel writes contract and submits to the Secretary of Commerce. If an Incentive Approval Committee (IAC) is deemed necessary, move to Step 4b, if not move to Step 4c.
b. Convene and hold Public IAC Meeting
c. If approved, Secretary of Commerce signs contract and notifies Quality Jobs Representative to send approved contract to company. Move to Step 4e.
d. If not approved, send denial letter and notify Quality Jobs Representative.
9 e. Company signs contract and returns to Quality Jobs Division.
f. Quality Jobs Division delivers signed contract to OK Tax Commission (OTC) and keeps copy.
g. General Counsel notifies QJ and ED Representatives signed contract has been receives, finalizes file and drafts congrats letter to company and copies Legislature and Secretary of Commerce.
h. Quality Jobs Division and General Counsel work with Marketing Division to prepare Press Data and coordinate announcements and celebration with the company.
Measurements:
• Since 2008, there have been 89 companies enrolled in the program.
• Since 2008, the total number of projected jobs created by the program is 18,657.
• The average QJ wage rate in 2008 was 23% higher than state average wage.
Source: Oklahoma Department of Commerce Note: Print this chart in color to see both lines
Evolution:
 Addition of Average Wage
 Recognizes dynamic wage rates with annual review of county averages and state index. Initially set at $25,000; indexed annually using BEA data. Currently $29,409
 Disadvantaged Geographies
 Targets counties or opportunity zones by setting adjusted wage levels
 Expanded Industries
 New industries regularly included to meet changing OK economy
 Multiple Contracts
 Encourages business growth while ensuring that primary contract responsibilities are met
 6% Net Benefit Option
 Allows a participating company to apply for a 2nd QJP contract and receive up to 6% if the average wage of new jobs are 150% of current jobs
 Change in Control
 Allows consideration for change in ownership or high-risk relocation, with higher future commitment from company
10 Small Employer Quality Jobs:
• Effective 1/1/1998
• Targeted to small businesses (90 employees or less)
• Up to 5% cash rebate of taxable wages for up to 7 years
• New job requirements are based on population
• Companies in counties over 200,000 are excluded, except in Opportunity Zones
• Wage requirements are adjusted for the average of small businesses in the county
21st Century Quality Jobs:
• Effective 11/1/2010
• Intended to promote impactful, high wage, high skill jobs without competing with existing incentives
• Expands qualifying industries up the value chain of current assets
• Qualifying average wage of new jobs is 300% of the county average or 300% of the average of OK county wages, currently $94,418
• Participants may receive up to a 10% Net Benefit Rate once they create at least 10 new jobs at higher average wage
3. Other States Quality Jobs Type Programs
The committee reviewed what other states are doing similar to Oklahoma’s Quality Jobs Program. (See Appendix B to this report.)
4. Other Quality Jobs Program Notes
The committee reviewed Dr. Larkin Warner’s study notes on the Quality Jobs Program (See Appendix C to this report.)
The committee reviewed the Oklahoma Tax Commission’s Quality Jobs Incentive Payment Report FY10 (See Appendix D to this report.)
5. Other Relevant Matters
The committee noted that the legislature acted in 2010 to impose a two-year moratorium on many of the Oklahoma tax credits (See Appendix E to this report.)
The committee also reviewed the Oklahoma Tax Commission’s State of Oklahoma Tax Expenditure Report 2009-2010.
The committee also reviewed Oklahoma Attorney General Opinion No. 2010-16 (issued on December 20, 2010). Of note, that opinion declares (at p. 3) that:
To be Constitutional, Economic Development Tax Credits must:
1. Serve a Public Purpose,
2. Be Supported by Adequate Consideration, and
3. Have Adequate Controls and Safe Guards.
11 III. Principles of Sound Tax Incentives
A review of the literature on economic development incentives provides a basis for identifying various principles that are widely agreed to. These principles can be used to guide the specification of a new program. They can also be used as a means for evaluating an existing program. Below we list 9 principles that the committee deems as important.
Principle 1. The costs of the incentive system should be less than the benefits.
Too often, we consider only the benefits, not the costs. Too often, we view the effect of incentives in a partial equilibrium sense, not general. For example, a highly successful incentive program might raise the cost of doing business for firms not receiving the incentive, necessitating a reduction in employment. States with balanced budget requirements must recognize that less revenue from one source creates greater burdens on existing firms and citizens. Similarly, when estimating the benefits and costs of an incentive program, the time value of money should be considered. That is, if the benefits of an incentive all occur many years in the future, the current benefit is significantly lessened and this impact must be accounted for in estimates of both costs and benefits.
Principle 2. An individual incentive program should fit well within the broad strategic framework of state economic objectives.
Individual programs should fulfill at least one key role in a broad portfolio of state economic development policy initiatives that focus on business attraction, business retention, new business start-up, high technology, efficient land use, geographic balance, and training to improve productivity. In addition, the state's objectives include a tax system characterized by equity and distributive justice. An overarching consideration in the choice and design of economic development incentives is the need to compete effectively with other jurisdictions which also offer incentives. Tax incentives for economic development are inherently selective and not available to all competitors within an industry (see Principle 4 below). To the extent possible, tax incentives should have minimum negative impacts on existing competitors unable to take advantage of the incentives' benefits.
Principle 3. The objectives of the program should be clearly identified.
Incentive programs have as their purposes (a) expansion of business activity that exports outside the regional economy, (b) substitution for imports to the regional economy, (c) increased productivity, (d) improved resource utilization, i.e., reduction of unemployment and underemployment. Just how a program is going to yield specific results should be clearly specified.
Principle 4. Incentive programs should be targeted to firms where the program will clearly make a difference.
Firms are not equal in their ability to contribute to the economic well-being of a region, as is evident by substantial variation in industry output, income, employment multipliers and emerging sectors wherein special competencies and competitive advantages rooted in regional research experience exist.
This is a basic fact of economic expansion that needs to be heeded. Targeting may also be necessary in order to compete with incentives offered by other jurisdictions.
12 The epitome of targeting is a “deal-closing” fund which is used by many jurisdictions to provide the marginal difference to a business making the location decision. “Deal-closing” funds are commonly used to create incentives to create or retain jobs by defraying costs for infrastructure, employee training or tax incentives.
Carefully administered targeting programs can reduce the overall cost to a state of its incentive programs. Targeting can avoid turning economic development incentives into generalized business “entitlements” which cost the state money but which do not change the behavior of business firms and thus do not promote economic development.
Principle 5. Incentive programs should be neutral with respect to the types of industries that qualify for the program.
Service industries are dominating growth in US businesses. If a firm’s application meets the tests of export expansion, import substitution, or other enhancements to resource utilization, it should not matter what industry the firm is identified with.
Principle 6. Incentive programs should have built-in evaluation mechanisms.
Without the capability to evaluate the benefits and costs of a program, there is little or no rationale for undertaking the program in the first place. Evaluation programs and generation of the appropriate data sources for evaluation need to be specified before the program is undertaken. The evaluation process needs to be followed closely according to plan.
Principle 7. Incentive programs should have sunset provisions and other features that enhance accountability.
Sunset provisions focus attention on the evaluation process and outcomes, and, thus, should be components of these programs. Industry is probably more mobile now than it has ever been, historically. Economic development initiatives should not fall into the trap of attempting to attract footloose industries and other copy-cat initiatives.
Principle 8. Incentive systems should be based on rules versus discretion.
Basing decisions on who gets incentives on a set of well-defined guidelines of eligibility is imperative to the ultimate potential for favorable evaluation.
Principle 9. Incentive systems using tax credits should seek to maximize the dollars flowing to the intended purpose.
Those incentive systems that utilize tax credits should consider the costs of those tax credits to the State and seek to structure credits in a manner that will maximize the dollars flowing to the intended purpose per dollar of state expenditures on the tax credit. Thus, all tax credits should be designated as directly transferable, given that (i) even when designated to be "non-transferable" by the enabling legislation, the benefits of tax credits can be bought and sold nonetheless, and (ii) the derivative transfers of non-transferable tax credits significantly increases the costs to the State thereby decreasing the overall economic benefit to Oklahoma.
13
IV. Committee Recommendations
The Incentive Review Committee wishes to work with the current legislature to develop a review process that provides the legislature with the information they want and can use.
After reviewing the incentives listed in Section II of this report, the committee states the following:
1. The purpose of each credit/incentive (both current and future) should be clearly defined in the legislation.
2. The committee believes that economic development tax credits should serve a public purpose, be supported by adequate consideration, and have adequate controls and safe guards.
3. The committee recommends the Oklahoma Department of Commerce and the Oklahoma Tax Commission work together to determine the necessary data required from Quality Jobs rebate recipients for measuring the success of the program and to put in place procedures for the periodic collection of such data. Furthermore, the committee would ask to be advised if any change in current law would be required to achieve this objective.
4. After review of the Quality Jobs Program, the committee recommends retention of the program as an important economic development tool.
14 Appendix A - Oklahoma Incentives List
Sources: OK Department of Commerce, OK Tax Commission, openbooks website and OK Insurance Dept. Effective: 4/26/2011
*This amt. is the OID credit remainder after known credits are put in their respective rows. 15
Incentive
Type
Statute/ Source
Sunset Date
Transferable
2009 OTC 511 cr
2009 OTC # of credits
2009 OID credits
Total 2009 credits taken
Total 2008 Credits Taken
Total 2007 Credits Taken
IRC Review Year/Status
OK Quality Jobs Program (21st Century QJ started in 2010 - no results yet)
Cash Payment
68 O.S. §§ 3601 et seq.
$59,071,458
$62,080,930
$53,391,293
2008 & 2010 Heard presentation
*Insurance Premium Tax Credit (Includes Home Office, PSA, Flood, Life & P&C Guaranty & Franchise Tax)
Insurance Department
36 O.S. § 625.1 (OID)
$32,933,218
$32,933,218
$29,923,904
$30,801,386
2008-2009-2010 (collected data)
Small Business Capital Formation Tax Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.60 - .65
12/31/2011
$3,623,763
193
$9,779,735
$13,403,498
$22,039,574
$15,294,701
2009 Review - 8/26/09 / 2007 Report
Rural Small Business Capital Formation Tax Credit
Income Tax Credit/ Exemption
68 O.S. §§ 2357.73 et seq.
12/31/2011
$7,905,428
353
$4,850,061
$12,755,489
$69,427,484
$57,776,877
2009 Review - 8/26/09 / 2007 Report
Qualified Rehabilitation Expenditures Tax Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.41
YES
$194,840
9
$10,607,699
$10,802,539
$6,296,255
$5,060,376
2008-2009 - No action at this time
Investment in qualified electric car
Income Tax Credit/ Exemption
$7,330,711
1,043
$7,330,711
Coal Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.11
12/31/2012
YES
$28,660
8
$6,007,014
$6,035,674
$10,858,123
$12,863,803
2008-2009 - No Action at this time
Construction of Energy Efficient Homes
Income Tax Credit/ Exemption
68 O.S. § 2357.46
YES
$3,153,539
171
$3,153,539
$5,693,426
$4,789,000
Investment/New Jobs Income Tax Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.4
$1,881,000
284
$1,881,000
$49,486,910
$124,707,650
2005 Report
Small Employer Quality Jobs Program
Cash Payment
68 O.S. §§ 3901 et seq.
$1,476,767
$1,259,051
$684,297
2008 & 2010 heard presentation
Aerospace Employee Tax Credit (New 2009)
Income Tax Credit/ Exemption
$1,073,307
230
$1,073,307
$0
$0
Volunteer Firefighter Credit
Income Tax Credit/ Exemption
68 O.S. § 2358.7
$594,482
1,881
$594,482
$538,487
$520,850
Venture Capital Tax Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.7 & .8
12/31/2008
$66,421
3
$414,300
$480,721
$14,018,037
$28,010,479
2007 Report
Credit for conversion of motor vehicles to clean burning fuel
Income Tax Credit/ Exemption
$465,128
150
$465,128
$1,371,847Appendix A - Oklahoma Incentives List
Sources: OK Department of Commerce, OK Tax Commission, openbooks website and OK Insurance Dept. Effective: 4/26/2011
*This amt. is the OID credit remainder after known credits are put in their respective rows. 16
Incentive
Type
Statute/ Source
Sunset Date
Transferable
2009 OTC 511 cr
2009 OTC # of credits
2009 OID credits
Total 2009 credits taken
Total 2008 Credits Taken
Total 2007 Credits Taken
IRC Review Year/Status
Credit for Biomedical Research Contribution
Income Tax Credit/ Exemption
$306,115
837
$306,115
$439,411
Income Tax Credit for Invesment in OK Producer-owned Agriculture Processing
Income Tax Credit/ Exemption
68 O.S. § 2357.25
1/1/2010
$277,896
14
$277,896
$3,924,607
$3,040,024
2009-2010 Heard Presentation 2/11/10
Manufacturers of Small Wind Turbines Tax Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.32 B
12/31/2007
YES
$255,269
27
$255,269
$1,676,569
$876,309
Poultry Litter Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.100
12/31/2013
$179,879
77
$179,879
$305,596
$218,841
Credit for electricity generated by zero-emission facilities
Income Tax Credit/ Exemption
$169,727
7
$169,727
$2,704,400
$2,194,213
Tax Credit for Entities in the Business of Providing Childcare
Income Tax Credit/ Exemption
68 O.S. § 2357.26
1/1/2004
$111,789
46
$111,789
$249,139
$137,276
Tax Credit for Banks Participating in the OK Rural Economic Development Loan Program
Income Tax Credit/ Exemption
68 O.S. § 2370.1
$81,272
2
$81,272
$0
$6,560
Breeders of Specially Trained Canines
Income Tax Credit/ Exemption
68 O.S. § 2357.203
$79,142
15
$79,142
$222,195
$340,222
Railroad Modernization Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.104
YES
$68,947
4
$68,947
$407,902
$373,618
2008 - Decided not to explore further
Income Tax Credit for Investment in an OK Film or Music Project
Income Tax Credit/ Exemption
68 O.S. § 2357.101
$40,886
15
$40,886
$38,895
$40,947
Energy Assistance Fund Contribution Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.6
$40,334
150
$40,334
$26,691
$24,905
Small Business Admin. (SBA) Guarantee Fee Tax Credit
Income Tax Credit/ Exemption
68 O.S. §§ 2370 and 2370-1
$33,478
46
$33,478
$288,789
$293,983
Credit for wages paid to an injured employee
Income Tax Credit/ Exemption
$31,367
16
$31,367
$25,576
$31,673Appendix A - Oklahoma Incentives List
Sources: OK Department of Commerce, OK Tax Commission, openbooks website and OK Insurance Dept. Effective: 4/26/2011
*This amt. is the OID credit remainder after known credits are put in their respective rows. 17
Incentive
Type
Statute/ Source
Sunset Date
Transferable
2009 OTC 511 cr
2009 OTC # of credits
2009 OID credits
Total 2009 credits taken
Total 2008 Credits Taken
Total 2007 Credits Taken
IRC Review Year/Status
Income Tax Credit for Construction of OK Film/Music Facilities
Tourism & Film Incentive
68 O.S. § 2001 & Amending Sections 2357.35-39
$25,325
1
$25,325
$1,710
$23,000
Aerospace Employer Tax Credit (New 2009)
Income Tax Credit/ Exemption
$21,454
6
$21,454
$0
$0
Employers who provide Child Care programs
Income Tax Credit/ Exemption
68 O.S. § 2357.27
1/1/2004
$10,530
7
$10,530
$4,558
$43,518
Enterprise Zone for local development
Income Tax Credit/ Exemption
68 O.S. § 2357.81
$9,936
2
$9,936
$150
$0
Qualified Ethanol Facilities Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.66
12/31/2010
$7,946
2
$7,946
$0
$6,750
Non-stop Air Service from OK to the Coast Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.28
1/1/2006
YES
$3,380
5
$3,380
$5,979
$73,184
2008 Recommended elimination Hearing Held 12/11/08
Food Service Establishments who pay for Hep A Vaccinations for Employees
Income Tax Credit/ Exemption
68 O.S. § 2357.33
$2,902
6
$2,902
$33,076
$73,180
Computer, Data Processing, Research & Development New Jobs Income Tax Credit
Income Tax Credit/ Exemption
68 O.S. 54006
$2,000
1
$2,000
$5,705
$16,879
Dry Fire Hydrant Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.102
$1,905
3
$1,905
$8,238
$41,919
Biodiesel Production Facility Tax Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.67
12/31/2012
$1,766
4
$1,766
$2,401
$0
Qualified Recycling Facility Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.59
12/31/1999
$1,571
5
$1,571
$24,546
$6,097,152
Recycling, Reuse & Source Reduction (Hazardous Waste) Incentive
Income Tax Credit/ Exemption
27 A O.S. §§ 2-11-303 et seq.
$1,131
4
$1,131
$3,700
$1,796
Recommended elimination Hearing Held 12/11/08
Gas Usage Tax Credit for Manufacturing
Income Tax Credit/ Exemption
68 O.S. § 2357 [C]
$229
4
$229
$44,000
$0
2009 Under Review 8/27/09Appendix A - Oklahoma Incentives List
Sources: OK Department of Commerce, OK Tax Commission, openbooks website and OK Insurance Dept. Effective: 4/26/2011
*This amt. is the OID credit remainder after known credits are put in their respective rows. 18
Incentive
Type
Statute/ Source
Sunset Date
Transferable
2009 OTC 511 cr
2009 OTC # of credits
2009 OID credits
Total 2009 credits taken
Total 2008 Credits Taken
Total 2007 Credits Taken
IRC Review Year/Status
Modification Expenses for Injured Employees
Income Tax Credit/ Exemption
68 O.S. § 2357.47
$143
3
$143
$7,037
$3,237
2008 - Decided not to explore further
Oil & Gas Production Tax Credit
Income Tax Credit/ Exemption
68 O.S. § 1001
6/30/2010
$0
$11,637,000
$0
Stafford Loan Origination Fee for banks & credit unions
Income Tax Credit/ Exemption
68 O.S. § 2370.3
$0
$23,901
$306,760
5 year Local Incentive
Ad Valorem Tax Exemption
62 O.S. § 860
$0
$0
$0
2006 Report
5% Areas for Oklahoma Quality Jobs Program
Cash Payment
Commerce Dept. (405) 815-5269
$0
$0
$0
2008 Heard presentation
Advanced Degree Program
Major Finance & Assistance Program
OK State Regents (405) 225-9100
$0
$0
$0
Agricultural Commodity Processing Facility Income Tax Exemption
Income Tax Credit/ Exemption
68 O.S. § 2358 [A] [6]
$0
$0
$0
2009 Under Review 8/27/09
Aircraft Maintenance Facilities Exemption
Sales Tax Exemption
68 O.S. § 1357 [20] [28]
$0
$0
$0
Aircraft Manufacturers Exemption License
Ad Valorem Tax Exemption
3 O.S. §§ 254 & 256.2
$0
$0
$0
Aircraft Manufacturing Facility
Sales Tax Exemption
68 O.S. § 1357 [16]
$0
$0
$0
Alternative Energy Sources Tax Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.32 A
1/1/2016
YES
$0
$0
$1,211,052
Alternative Fuel Vehicle (AFV) & Refueling Infrastructure Tax Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.22
1/1/2010
$0
$0
$895,061
Basic & Applied Research & Technology Program through OCAST
Major Finance & Assistance Program
74 O.S. §§ 5060.1 et seq.
$0
$0
$0
Commercial Space Industry Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.13
$0
$0
$22,712
2008 Recommended elimination Hearing Held 12/11/08
Community Development Block Grants (CDBGs)
Major Finance & Assistance Program
Commerce Dept. (405) 815.5356
$0
$0
$0
Computer Services & Data Processing
Sales Tax Exemption
68 O.S. § 1357 [21]
$0
$0
$0Appendix A - Oklahoma Incentives List
Sources: OK Department of Commerce, OK Tax Commission, openbooks website and OK Insurance Dept. Effective: 4/26/2011
*This amt. is the OID credit remainder after known credits are put in their respective rows. 19
Incentive
Type
Statute/ Source
Sunset Date
Transferable
2009 OTC 511 cr
2009 OTC # of credits
2009 OID credits
Total 2009 credits taken
Total 2008 Credits Taken
Total 2007 Credits Taken
IRC Review Year/Status
Computer Services/ Data Processing/ Telecommunications Equipment
Sales Tax Refund
68 O.S. § 54003
$0
$0
$0
Construction Materials
Sales Tax Refund
68 O.S. § 1359 [7]
$0
$0
$0
Empowerment Zone Facility Bonds - Oklahoma City
Major Finance & Assistance Program
26 U.S.C. § 1394 et seq.
$0
$0
$0
Ethanol Fuel Retailer Tax Credit
Income Tax Credit/ Exemption
68 O.S. § 500.10-1
$0
$0
$0
Excise Tax on Aircraft Sales
Sales Tax Exemption
68 O.S. §§ 6001 et seq.
$0
$0
$0
Exempt Inventory (County Assessor's Office)
Ad Valorem Tax Exemption
Art. 10, § 6A Okla. Const. & 68 O.S. § 2902.2
$0
$0
$0
2006 Report
Federal Empowerment Zone Incentive - Oklahoma City
Income Tax Credit/ Exemption
Oklahoma City only
$0
$0
$0
Foreign-trade Zones
Transportation & Distribution Benefit
Port of Muskogee, Tulsa Port of Catoosa, Will Rogers International Airport and Durant International Business Park
$0
$0
$0
General Obligation Limited Tax Bonds (GOLTBs)
Major Finance & Assistance Program
Art. 10, § 35, Oklahoma Constitution
$0
$0
$0
i2E - Turning Innovation into Enterprise
Major Finance & Assistance Program
74 O.S. §§ 5060.2 [a] [b]
$0
$0
$0
Income Tax Exemption for Interest Pd. On Bonds issued by or on Behalf of Public Agencies
Income Tax Credit/ Exemption
68 O.S. § 2358.5
$0
$0
$0
Incubator Site Tenant Tax Exemption
Income Tax Credit/ Exemption
74 O.S. § 5078
$0
$0
$0
2009 Under Review 8/27/09Appendix A - Oklahoma Incentives List
Sources: OK Department of Commerce, OK Tax Commission, openbooks website and OK Insurance Dept. Effective: 4/26/2011
*This amt. is the OID credit remainder after known credits are put in their respective rows. 20
Incentive
Type
Statute/ Source
Sunset Date
Transferable
2009 OTC 511 cr
2009 OTC # of credits
2009 OID credits
Total 2009 credits taken
Total 2008 Credits Taken
Total 2007 Credits Taken
IRC Review Year/Status
Industrial Access Roads
Transportation & Distribution Benefit
Dept. of Transportation
$0
$0
$0
International Trade Processing Center at Dept. of Commerce
Transportation & Distribution Benefit
74 O.S. § 2121 et seq.
$0
$0
$0
Job Matching through OK Employment Security Commission
Major Finance & Assistance Program
OESC (405) 557-7149
$0
$0
$0
Manufacturers Sales Tax Exemption
Sales Tax Exemption
68 O.S. §§ 1359, 1359.2 & 1364
$0
$0
$0
New Markets Tax Credits & OK State Tax Credits in conjunction w/ New Markets Tax Credit Program
Income Tax Credit/ Exemption
26 U.S.C. § 45D
$0
$0
$0
New Products Dev. Income Tax Exemption
Income Tax Credit/ Exemption
74 O.S. § 5064.7
$0
$0
$0
OK Capital Access Program
Major Finance & Assistance Program
www.ocib.org
$0
$0
$0
OK Export Finance Program
Major Finance & Assistance Program
Commerce Dept. (405) 815.5216
$0
$0
$0
OK Institute of Technology through OCAST
Major Finance & Assistance Program
74 O.S. §§ 5060.3 et seq.
$0
$0
$0
Oklahoma Film Enhancement Rebate Act at Film & Music Office
Tourism & Film Incentive
68 O.S. §§ 3621-3626
7/1/2014
$0
$0
$0
Oklahoma Finance Authorities
Major Finance & Assistance Program
74 O.S. §§ 851 et seq. & 5062.1 et seq.
$0
$0
$0
Oklahoma Opportunity Fund
No appropriations given in 2008
HB 1169
$0
$0
$0
Other Truck Registration Benefits
Transportation & Distribution Benefit
47 O.S. §§ 1101 et seq.
$0
$0
$0
Partial Unemployment Benefits Program
Major Finance & Assistance Program
OESC (405) 962-7584
$0
$0
$0Appendix A - Oklahoma Incentives List
Sources: OK Department of Commerce, OK Tax Commission, openbooks website and OK Insurance Dept. Effective: 4/26/2011
*This amt. is the OID credit remainder after known credits are put in their respective rows. 21
Incentive
Type
Statute/ Source
Sunset Date
Transferable
2009 OTC 511 cr
2009 OTC # of credits
2009 OID credits
Total 2009 credits taken
Total 2008 Credits Taken
Total 2007 Credits Taken
IRC Review Year/Status
Private Activity Bond Allocation
Major Finance & Assistance Program
62 O.S. §§ 695.23 et seq.
$0
$0
$0
Public Trust Financing: Industrial Revenue Bonds
Major Finance & Assistance Program
60 O.S. § 176 et seq., 74 O.S. § 851 et seq., & 61 O.S. § 651 et seq.
$0
$0
$0
Quality Jobs Investment Program
Major Finance & Assistance Program
74 O.S. § 5062.8A
$0
$0
$0
Rural Economic Development Loan Program
Major Finance & Assistance Program
62 O.S. §§ 90.1 - 90.9 & 68 O.S. § 2370
$0
$0
$0
Sales Tax Financing
Major Finance & Assistance Program
68 O.S. §§ 1370 & 2701
$0
$0
$0
Sales/Income Tax Credit for Tourism Attraction Projects
Income Tax Credit/ Exemption
68 O.S. §§ 2357.34-40
$0
$0
$0
Small Business Linked Deposit Program
Major Finance & Assistance Program
62 O.S. §§ 88.1A et seq.
$0
$0
$0
Small Business Loan Guarantees
Major Finance & Assistance Program
15 U.S.C. § 632 et seq.
$0
$0
$0
Space Transport Vehicle Provider
Income Tax Credit/ Exemption
68 O.S. § 2357.42
1/1/2007
YES
$0
$0
$3,818,502
2008 Held Hearing & recommended elimination of
Spaceport
Sales Tax Exemption
68 O.S. § 1356 [32-37]
$0
$0
$0
State Decision
Ad Valorem Tax Exemption
68 O.S. § 2902
$0
$0
$0
Tax Incentives on Former Indian Reservation Lands
Income Tax Credit/ Exemption
26 I.R.C. §§ 45A, 168 (j) & 68 O.S. § 2358 [17]
12/31/2009
$0
$0
$0
Tax Increment Financing (TIF)
Major Finance & Assistance Program
62 O.S. §§ 850 et seq.
$0
$0
$0
2006 Report
Technology Partnership Assistance
Major Finance & Assistance Program
70 O.S. §§ 3206.3 & Art. 10 §§ 14 & 15 of Oklahoma Constitution
$0
$0
$0Appendix A - Oklahoma Incentives List
Sources: OK Department of Commerce, OK Tax Commission, openbooks website and OK Insurance Dept. Effective: 4/26/2011
*This amt. is the OID credit remainder after known credits are put in their respective rows. 22
Incentive
Type
Statute/ Source
Sunset Date
Transferable
2009 OTC 511 cr
2009 OTC # of credits
2009 OID credits
Total 2009 credits taken
Total 2008 Credits Taken
Total 2007 Credits Taken
IRC Review Year/Status
Technology Transfer Income Tax Exemption
Income Tax Credit/ Exemption
68 O.S. § 2358 [C}
$0
$0
$0
Telecommunications
Sales Tax Exemption
68 O.S. §§ 1354 & 1357 [18] [26]
$0
$0
$0
Training for Industry Program (TIP)
Employee Training through Career Techs
$0
$0
$0
Truck Registration Benefit
Transportation & Distribution Benefit
Corporation Commission (405) 521-3246
$0
$0
$0
Venture Capital Investment Board/Access Program run by Oklahoma Capital Investment Board (OCIB)
Major Finance & Assistance Program
74 O.S. § 5085.1
$0
$0
$0
Welfare-to-Work Tax Credit (WTW)
Income Tax Credit/ Exemption
Fed. Through OESC
$0
$0
$0
Work Opportunity Tax Credit Program (WOTC)
Income Tax Credit/ Exemption
Fed. Through OESC
$0
$0
$0
Workforce Investment Act
Major Finance & Assistance Program
Commerce Dept (405) 815-5206
$0
$0
$0
Totals
$28,083,598
5,634
$64,592,027
$92,675,625
$295,105,799
$354,113,985Appendix B Quality Job Type Programs 4/26/2011
Source: C2ER.org Incentive Database 23
Type
Overview NOTE: This list does not show availability of funds. Other funding updates, stipulations and policies may be in effect.
OK
Oklahoma Department of Commerce
Quality Jobs Program
Tax refund or rebate
This innovative program gives qualifying enrolled companies quarterly cash rebates of up to five percent (5%) of taxable wages for up to 10 years. New legislation in 2005 allows companies in the program who expand again to receive up to 6% wage rebates based on meeting certain criteria.
AR
Arkansas Department of Economic Development
Create Rebate Program
Tax refund or rebate
Under terms negotiated by the Arkansas Department of Economic Development, this program provides businesses a financial rebate from 3.9 to 5 percent of the annual payroll of the new, full-time, permanent employees. The financial incentive is 3.9 percent in Tier 1 counties, 4.25 percent in Tier 2 counties, 4.5 percent in Tier 3 counties and 5 percent in Tier 4 counties.
Offered at the discretion of the director of the Arkansas Economic Development Commission. Businesses that qualify as "targeted businesses" may qualify for three special incentives designed to help new, knowledge-based businesses in their early years. These discretionary incentives are for start-up companies in emerging sectors:
* A refund of sales and use taxes paid on the purchase of building materials and machinery and equipment associated with the approved project
* A transferable income tax credit equal to 10% of payroll for up to five years
* A transferable income tax equal to 33% of eligible research and development expenditures
AR
Arkansas Department of Economic Development
Advantage Arkansas (Income Tax Credit)
Tax credit
Advantage Arkansas provides a credit on state income tax equal to between 1 percent and 4 percent of new payroll for five years, depending on the tier of the county in which the business locates.
CO
Colorado Office of Economic Development & International Trade
Job Creation Performance Incentive Fund (PIF)
Funding Not available at this time
The Job Creation Performance Incentive Fund (PIF) provides a performance-based incentive payment to qualifying companies that have created net new full-time permanent jobs (jobs) paying above average wages.
CO
Colorado Office of Economic Development & Intl Trade
Job Growth Incentive Tax Credit
Tax credit
Businesses that create at least 20 net new full time jobs (or five net new jobs in an Enhanced Rural Enterprise zone) with an average yearly wage of at least 110% of the county average wage rate where the business is located may deduct up to 50% of the FICA paid by the business as a credit against state income taxes.
KS
Kansas Department of Revenue
Business and Job Development Credit
Tax credit
The business and job development credit is allowed as a direct tax credit against the income tax of any Kansas taxpayer if: an investment in a qualified business facility is made, and; at least two qualified business facility employees are hired as a direct result of that investment.
KS
Kansas Department of Commerce
Promoting Employment Across Kansas (PEAK)
Grant
New! Promoting Employment Across Kansas (PEAK) – This program offers qualified companies that are relocating operations to Kansas the ability to retain 95 percent of their payroll withholding tax for a period of five to seven years. Companies need to create at least ten new jobs within two years in metropolitan areas or five new jobs within two years in all other counties of the state. High-impact projects that create 100 new jobs within five years can retain 95 percent of payroll withholding tax for seven to 10 years. The number of years that withholding tax can be retained depends on how much the annual average wage of the relocated jobs at the Kansas worksite will exceed the county average wage.
Quality Jobs Type Program
AR
Arkansas Department of Economic Development
Targeted Businesses Incentives
Tax creditAppendix B Quality Job Type Programs 4/26/2011
Source: C2ER.org Incentive Database 24
Type
Overview NOTE: This list does not show availability of funds. Other funding updates, stipulations and policies may be in effect.
LA
Louisiana Department of Economic Development
Quality Jobs Program
Tax credit, Tax refund or rebate
The Quality Jobs Program provides cash rebates as an incentive to encourage businesses to locate or expand existing operations in Louisiana, to create quality jobs, and to promote economic development by focusing on Louisiana Vision 2020’s traditional and seed clusters. This program provides 5% or 6% cash rebate of annual gross payroll for new direct jobs for up to 10 years. It also allows for 4% sales/use tax rebate on capital expenditures; or 1.5% investment tax credit for qualified expenses.
For “Small/Expanding” businesses, the benefit of the program is the retention of the state withholding tax of the new jobs.
For “Technology” and “High Impact” businesses, the benefits of the program are:
the retention of the state withholding tax of the new jobs
state tax credits, which are refundable, transferable and/or saleable.
The program benefits are based on a percentage of the payroll of the new jobs.
The program benefits are not provided until the minimum new job threshold is met and the company meets the average wage and health insurance requirements.
This tax credit can be applied to Chapter 143 (state income tax, excluding withholding tax) and Chapter 148 (financial institutions tax).
Tax credits must be claimed within one year of the close of the taxable year that they were issued.
Tax credits can only be applied to tax liability for the year in which they were earned.
Any unused balance is refundable. The credits may also be transferred, sold or assigned.
NM
New Mexico Taxation and Revenue Department
High Wage Jobs Tax Credit
Tax credit
A credit equal to 10% of the wages and benefits paid for each new economic-base job created that: a. Pays at least $28,000/year in a community with a population of less than 40,000 or in the unincorporated area of a county b. Pays at least $40,000/year in a community with a population of 40,000.
TX
Nothing comparable to other states
Quality Jobs Type Program
MO
Missouri Dept. of Economic Development
Missouri Quality Jobs Program
Tax creditAppendix B Quality Job Type Programs 4/26/2011
Source: C2ER.org Incentive Database 25
State
Closing Fund
Source
OK
Yes - Not currently used
http://www.okcommerce.gov/Site-Selection/Incentives/Opportunity-Fund
AR
Yes - Active
http://governor.arkansas.gov/newsroom/index.php?do:newsDetail=1&news_id=694
CO
Doesn't appear to currently be available.
KS
Yes - Doesn't appear to currently be used
http://www.kansasinc.org/pubs/working/ContingencyFundAtt2.28.09.pdf
LA
Doesn't appear to currently be available.
http://www.la-par.org/Publications/PDF/dealclose.pdf
MO
None found
NM
Yes, but doesn't appear to be available for current use.
http://www.tlc.state.tx.us/pubspol/dealclosing.pdf
TX
Yes - Active
http://www.tlc.state.tx.us/pubspol/dealclosing.pdf
Opportunity Fund (In 2002 Louisiana looked into this program, but it doesn't appear it was ever implemented.)
Invest New Mexico - ($220 million annually) Could not find evidence of current use.
Texas Enterprise Fund - Funding $295 million (biennial). Governor, lieutenant governor and speaker approve.
Description - NOTE: This list does not show availability or use of funds. Additional state funding, stipulations and policies may be in effect.
Opportunity Fund - There is currently minimal funding available.
Governor's Quick Action Closing Fund (2007) - Arkansas Governor appears to use this fund, but to exactly what extent is not known.
Colorado Economic Development Fund. Could not find evidence of current use.
Contingency FundAppendix C
Notes on the Quality Jobs Program
In the following discussion, the emphasis is on the very basic principles underlying the Quality Jobs Program and its progeny, the Small Employer Quality Jobs Program and the 21st Century Quality Jobs Program. There are additional detailed requirements such as the specification of minimum gross payroll, minimum wage levels, and industries and locations with special eligibility requirements and benefit conditions. These are set forth in the Oklahoma Department of Commerce's "2011 Oklahoma Business Incentives and Tax Information Guide" available on the department's web site and 68-3601 et seq. of the Oklahoma Statutes.
The original economic development incentive created by the 1993 Oklahoma Quality Jobs Program Act is by far the most significant of the three programs described above. The Small Employer program accounted for around $1.5 million of incentive payments in FY2009 while the Quality Jobs Program paid $59.1 million. The 21st Century program for very high wage establishments is currently in the process of being implemented.
The state government funds these programs by having the Oklahoma Tax Commission take the necessary tax receipts "off the top" before recording tax receipts for regular government purposes. By not relying on regular legislative appropriations or on a predetermined set-aside for funding the payments, there is never any question as to whether establishments participating in the incentive program will receive their quarterly payments. This procedure also apparently exempts the Quality Jobs Program from being reported as part of the Oklahoma Tax Commission's comprehensive reports on "tax expenditures."
Rather than relying on the annual appropriations process, oversight of the program is achieved by requiring the Oklahoma Department of Commerce to prepare a triennial report to the Governor and to the leaders of the state's two legislative bodies. These reports are supposed to contain a fiscal analysis of the costs and benefits of the program to the state. The latest triennial report dated March 2011 does not contain such a specific fiscal analysis. However, it is emphasized herein that a technical analysis of costs and benefits to state government is an explicit component of the procedure by which many of the applying establishments are judged to be eligible to receive the incentive payments. Critical to this eligibility is the relationship between "direct state benefits" and "direct state costs."
The Direct State Benefits refer to increased revenues to state government as a result of the additional employees hired under the program. Additional income to the state is from two principal sources: (1) direct additional income tax receipts, and (2) direct additional consumption tax receipts. Data are collected for a moving average of jobs per quarter, payroll each quarter, and an estimate of average wage per employee net of fringe benefits. Tax revenue per new employee is higher to the extent that income per worker is higher.
Note that these direct benefits apply only to the new state revenues generated by the new hires. As a general rule, an establishment is eligible for the Oklahoma Quality Jobs Program if it is involved in manufacturing or activity generating at least 75 percent of sales outside of the state of Oklahoma. These are "basic" industries for which the hiring of new employees generates additional spending and new jobs elsewhere in the state as the establishments purchase inputs from other Oklahoma establishments, and also generates revenue and new jobs to enterprises selling goods and services to the new employees. All this activity generates additional revenues to the state government well beyond the direct benefits of the initial new jobs. This means that there is an inherent tendency for the Quality Jobs Program to underestimate true total benefits.
26 The additional new employment also generates Direct State Costs to government when workers move into Oklahoma from other jurisdictions. The share of new jobs going to persons migrating into Oklahoma is estimated for each new Quality Jobs contract based on population trends, wages, industry, and geography applicable to the firm in question.
Costs are then estimated using statewide averages for the individuals and families predicted to migrate into the state. In 2010, for example, it was assumed that new common school costs per student were $2,573; costs for health, safety, and transport were $562 per person; and general government costs were $309 per person. As the calculations make clear, it is less costly to the state for the new Quality Jobs to be filled by existing state residents rather than migrants from elsewhere.
Benefit cost analysis for the program continues with the calculation of Net Direct State Benefits which is Direct State Benefits – Direct State Costs.
A Net Benefit Rate is then calculated as the Net Direct State Benefits as a percentage of the Gross Payroll which the establishment is committed to pay its new workers. Other things being equal, an establishment's net benefit rate will be greater, the fewer new workers it hires from out-of-state.
The Quarterly Incentive Payment to the participating enterprises is then calculated by multiplying the Actual Gross Payroll received by the new workers by the Net Benefit Rate.
The statute states, generally, that the net benefit rate used for calculating the incentive payment is 5 percent or less and cannot exceed 5 percent. The principal exception is a net benefit rate fixed at 5 percent for firms locating in areas of the state subject to economic stress. Such areas include "opportunity zones" which are census tracts in which 30 percent or more of the population is living with incomes below the official poverty level, and entire counties with per capita incomes 85 percent or less than the statwide average, population decreases over the past 10 years, or with relatively high unemployment rates.
The above discussion suggests the likelihood that, for the entire program, it is unlikely that the cost to the state would exceed the net direct state benefits as defined above. There are bound to be some participants automatically classified to receive payments based on a net benefit rate of 5 percent that have actual net benefit rates below 5 percent; there are also firms—particularly those with wage levels in excess of $50,000 for which net benefit rates exceed the applicable 5 percent maximum. Thus the Quality Jobs Act Program appears likely to be consistent with the first principle for evaluating incentives used herein by the Incentive Review Committee, i.e., that the costs of the incentive system should be less than the benefits. In fact, between the Act's passage in 1993 and 2000, it was certain that benefits to the state exceeded costs. The 2000 session of the Oklahoma legislature added the mandatory 5 percent benefit for troubled geographic areas.
There are several other considerations worthy of note concerning the assessment of the Quality Jobs Program. From its beginning in 1993, the initiative has been judged favorably by professionals in the field of economic development. Illustrative is the following quotation from the Oklahoma Department of Commerce's 2002 triennial report on the program to the governor and the legislative leadership.
“By most any measure, the Quality Jobs Program has been a success. Created at a time when the State's economy needed a boost in terms of recognition and employment growth, the program became a leading-edge incentive among states. If imitation is the sincerest form of flattery, Oklahoma can feel proud of the fact that so many states have followed suit and patterned programs after ours.”
27 Appendix B to the current Incentive Review Committee Report presents a selected overview of quality jobs type programs in states surrounding Oklahoma.
Finally, there are two nagging questions that always arise in the evaluation of government financed economic development incentives. The first relates to competitive reactions of existing enterprises. The second, and more fundamental question, involves whether the decision to locate or expand was caused or influenced by the incentive.
First, it is possible that the firms receiving the incentive payments are willing and able to pay higher wage rates and bid workers away from older well-established local firms. The same sort of problem could exist when a firm receiving the Quality Jobs Payments is competing directly for markets with other Oklahoma firms not participating in the program. It can be assumed that if this local impact were a significant feature, there would be a significant level of related public discourse. Such does not appear to be the case.
A second nagging question always emerges. Would the establishments participating in the Quality Jobs Program have located or expanded in Oklahoma anyway—hiring new workers with the same intensity without the program at all? There is plenty of anecdotal evidence from economic development practitioners as to the program's effectiveness. Yet there are features that suggest that the program is not always the cause for new jobs.
In FY 2009, the Oklahoma Department of Commerce's triennial report indicates that new participants included 3 startups, 3 new establishments, and 25 that were expanding. That means that 25 of the 31 new enrollees had already made past decisions to locate in Oklahoma. In some cases, no doubt, these past locational decisions determined where future expansions will occur.
Along the same line of reasoning, it is interesting to note firms that received in excess of $1 million in cash payments in FY 2010 as reported by the Oklahoma Tax Commission.
Boeing Aerospace Operations $ 1,343,792
Chesapeake Energy Corp. 2,234,877
Conoco Phillips 2,149,041
Dell Marketing and Dell USA 3,710,241
Devon Energy 1,505,400
Farmers Insurance Group 1,148,255
SandRidge Operating Company 3,356,941
Spirit Aerosystems 2,401,440
Sprint Spectrum LP/ T Buschert 1,710,998
The Prof Basketball Club LLC 5,281,778
Wal-Mart Stores East LP 1,437,583
Zeledyne LLC 1,226,928
All of the 143 FY2010 recipients of Quality Jobs Program payments are listed in Appendix D. Total payments for FY 2010 were $54,011,640.
Economic developers "pulled out all the stops" to attract Dell to its current facility in Oklahoma City. Given the amount of the Quality Jobs payment, there can be little doubt of the program's importance in that locational decision. Boeing appears committed to continue expanding at the Tinker AFB development complex. Aerospace is a major focus of the state's economic development efforts. For the energy companies, it is possible that their ties to Oklahoma are so great that the locations of their employment expansions are relatively inflexible. However, it is important to remember how many major energy companies have shifted their headquarters to Houston.
Source: Larkin Warner 28 29
NAME
A G EQUIPMENT CO
3401 W ALBANY
BROKEN ARROW
OK
74012
$356,801.27
ABB INC
7051 INDUSTRIAL BLVD
BARTLESVILLE
OK
74006
$299,311.99
ADFITECH INC
3001 TECHNOLOGY DRIVE
EDMOND
OK
73013
$402,518.24
ADVANCE FOOD CO #1 & #3
201 S RALEIGH RD
ENID
OK
73701
$340,014.30
ADVANCED FINANCIAL SOLUTIONS 1
1200 SOVEREIGN ROW
OKLAHOMA CITY
OK
73108
$120,286.49
AEGIS FOOD TEST LABS OKLA LLC
3532 SW 2ND ST BLDG D
OKLAHOMA CITY
OK
73108
$2,121.28
AFFINIA PRODUCTS CORP LLC
5500 S HATTIE AVE
OKLAHOMA CITY
OK
73129
$174,935.28
ALBON MFG LLC
2801 TECHNOLOGY PL
NORMAN
OK
73071
$8,504.05
ALL STATE TANK MFG LLC
511 INDUSTRIAL PARK RD A
GROVE
OK
74344
$65,246.99
ALLTRA CORP
1600 PARTRIDGE RD
DEWEY
OK
74029
$21,804.07
AMERI-TI INC
5785 BIRD CREED AVE
CATOOSA
OK
74015
$28,158.65
AMERICAN BANKERS INSURANCE CO
6501 W GORE
LAWTON
OK
73505
$619,929.16
AMERICAN CANCER SOCIETY INC
1599 CLIFTON RD NE
ATLANTA
GA
30329
$301,228.98
AMERICAN CASTINGS LLC
PO BOX 69
PRYOR
OK
74362
$325,350.34
AMERICAN WOODMARK CORP
3102 SHAWNEE DR
WINCHESTER
VA
22601
$61,205.45
ARINC INC #2
6400 S E 59TH ST
OKLAHOMA CITY
OK
73135
$287,346.24
ARKANSAS BOX LLC
#1 ARCHERY LANE
POCOLA
OK
74902
$39,126.70
AUTO-TURN MFG INC
9800 S 219TH EAST AVE
BROKEN ARROW
OK
74014
$3,066.22
AXH AIR-COOLERS LLC
401 E LOWRY RD
CLAREMORE
OK
74017
$499,994.48
BALON CORP
3256 S HATTIE AVE
OKLAHOMA CITY
OK
73129
$113,172.45
BAMA COMPANIES INC #1
2745 E 11TH ST
TULSA
OK
74159
$413,345.08
BANK OF OKLAHOMA NA
PO BOX 2300
TULSA
OK
74192
$242,290.50
BOEING AEROSPACE OPERATIONS
8120 MID AMERICA BLVD STE 300
OKLAHOMA CITY
OK
73135
$1,343,791.84
CALLIDUS TECHNOLOGIES LLC
7130 S LEWIS AVE #335
TULSA
OK
74136
$333,576.96
CAMERON TECHNOLOGIES US INC
14450 JFK BLVD
HOUSTON
TX
77032
$264,792.95
CAPITAL ONE AUTO FINANCE INC
15000 CAP ONE DR/12077-0270
RICHMOND
VA
23238
$407,971.92
CARDINAL FG CO
775 PRAIRIE CTR DR STE 200
EDEN PRAIRIE
MN
55344
$455,034.30
CASECO MANUFACTURING INC
19105 S HWY 66
CLAREMORE
OK
74017
$37,524.06
CCA OF TENNESSEE LLC
10 BURTON HILLS BLVD
NASHVILLE
TN
37215
$59,824.92
CHART COOLER SERV CO INC
5500 E INDEPENDENCE
TULSA
OK
74115
$185,436.01
CHESAPEAKE OPERATING INC #2
6100 N WESTERN AVE
OKLAHOMA CITY
OK
73118
$2,234,876.89
CLIMATE CRAFT INC #2
518 N INDIANA AVE
OKLAHOMA CITY
OK
73106
$109,260.75
CLIMATE MASTER INC
7300 SW 44TH ST
OKLAHOMA CITY
OK
73179
$196,080.94
CNI ADMINISTRATION SERVICES
2600 JOHN SAXON RD
NORMAN
OK
73071
$276,553.78
COCA-COLA ENTERPRISES INC
2500 WINDY RIDGE PKWY STE 700
ATLANTA
GA
30339
$498,511.25
CONOCOPHILLIPS CO
1490 H PLAZA OFFICE BLDG
BARTLESVILLE
OK
74006
$2,149,041.41
COUGAR TOOL AMERICAS INC
9505 W RENO AVE
OKLAHOMA CITY
OK
73127
$28,515.73
D&L MANUFACTURING INC
1915 S 49TH W AVE
TULSA
OK
74107
$59,417.25
DAL-ITALIA LLC
PO BOX 12069
CALHOUN
GA
30703
$785,087.63
DELL MKTG LP OBO DELL USA LP
PO BOX 676021
DALLAS
TX
75267
$2,396,758.53
DELL USA LP #2
PO BOX 676021
DALLAS
TX
75267
$1,313,482.14
DELOITTE CONSULTING LLP
100 KIMBALL DR
PARSIPPANY
NJ
07054
$137,808.61
DEVON ENERGY PROD CO LP #2
20 N BROADWAY
OKLAHOMA CITY
OK
73102
$1,505,399.77
DIRECTV CUSTOMER SERVICES INC
PO BOX 915 RE/R08/N366
EL SEGUNDO
CA
90245
$764,537.59
DMI INDUSTRIES INC
15300 TIGER SWITCH RD
TULSA
OK
73116
$336,344.48
DOLGENCORP LLC #2
401 GENERAL DRIVE
ARDMORE
OK
73401
$220,982.34
DOLLAR TREE DISTRIBUTION INC
500 VOLVO PARKWAY
CHESAPEAKE
VA
23320
$201,394.27
DOT FOODS INC
RT 99 SOUTH
MT STERLING
IL
62353
$251,299.37
EAGLE SUSPENSIONS INC
1811 W ARKANSAS ST
DURANT
OK
74701
$200,714.48
ENVIRO SYSTEMS INC
40000 HWY 99 N
SEMINOLE
OK
74868
$86,164.48
EXTERRAN ENERGY SOL LP #2
20602 E 81ST ST
BROKEN ARROW
OK
74014
$43,247.58
FARMERS INSURANCE GROUP
4680 WILSHIRE BLVD
LOS ANGELES
CA
90010
$1,148,255.00
FLIGHT SAFETY INTERNATIONL INC
2700 N HEMLOCK CIRCLE
BROKEN ARROW
OK
74012
$74,707.27
GARVER ENGINEERS LLC
10015 E 51ST ST
TULSA
OK
74146
$30,627.57
GCOE LLC
7950 JONES BRANCH DR
MCLEAN
VA
22107
$92,414.11
GEA RAINEY CORP
5202 W CHANNEL RD / P OSTEN HR
CATOOSA
OK
74015
$117,838.58
GMX RESOURCES INC
9400 N BROADWAY STE 600
OKLAHOMA CITY
OK
73114
$116,447.16
OKLAHOMA TAX COMMISSION
QUALITY JOBS INCENTIVE PAYMENT REPORT FY1030
GORDON BROS SUPPLY INC
5498 HWY 66 W
STROUD
OK
74079
$33,775.58
HALLIBURTON ENERGY SERV INC #2
1015 BOIS D'ARC AVE
DUNCAN
OK
73536
$66,863.37
HARSCO CORP
5215 ARKANSAS RD
CATOOSA
OK
74015
$15,023.13
HARTFORD FINANCIAL SERV GROUP
200 EXECUTIVE BLVD
SOUTHINGTON
CT
6489
$177,168.88
HUBER ENGINEERED WOODS LLC
PO BOX 1250
BROKEN BOW
OK
74728
$159,589.93
HYATT SHARED SERV CENTER LLC
830 CITY AVE
MOORE
OK
73160
$332,050.14
I C BUS OF OKLA LLC #2
2232 N MINGO RD
TULSA
OK
74116
$2,066.13
IC BUS OF OKLA LLC #1
2322 N MINGO RD
TULSA
OK
74116
$374,575.58
ICON CONSTRUCTION INC
9909 W UNIVERSITY DR STE 510
MCKINNEY
TX
75071
$45,805.23
IMATION ENTERPRISES CORP
1 IMATION PL
OAKDALE
MN
55128
$114,704.14
IMTEC IMAGING LLC
2401 N COMMERCE
ARDMORE
OK
73401
$49,746.23
INTERNATIONAL BUS MACH 3 & 4
1301 K ST NW STE 1200W
WASHINGTON
DC
20005
$319,888.38
INTERNATIONAL INS BROKERS LTD
303 REUNION CENTER 9 E 4TH ST
TULSA
OK
74103
$130,939.16
JASCO PRODUCTS CO LLC
311 NW 122ND
OKLAHOMA CITY
OK
73114
$257,260.06
JOHN ZINK CO LLC
11920 E APACHE
TULSA
OK
74116
$54,070.54
KANBAR PROPETY MGMT LLC
15 E 15TH ST STE 2700
TULSA
OK
74103
$87,600.51
KEMPER VALVE & FITTINGS CORP
PO BOX 400
WAUCONDA
IL
60084
$14,222.03
KIRKWOOD METAL SERVICES LLC
3153 N LEWIS AVE
TULSA
OK
74110
$19,125.15
LAREDO PETROLEUM INC
15 W 6TH ST STE 1800
TULSA
OK
74119
$344,742.96
LEVEL 3 COMMUNICATIONS LLC #2
1025 ELDORADO BLVD
BROOMFIELD
CO
80021
$283,503.89
M & M ENGINEERED PRODUCTS LLC
522 N ASH ST
NOWATA
OK
74048
$9,562.28
MAGELLAN MIDSTREAM HOLD GP LLC
ONE WILLIAMS CENTER MD 28-8
TULSA
OK
74172
$922,228.12
METCRAFT INC
P903 E 104TH ST STE 130
KANSAS CITY
MO
64131
$8,055.48
MID AMERICAN STL & WIRE LLC #2
PO BOX 296
MADILL
OK
73446
$79,638.71
MID AMERICAN STL & WRE LLC #1
799 HWY 70 S
MADILL
OK
73446
$183,299.07
MIDCO FABRICATORS INC
PO BOX 1711
GAINESVILLE
TX
76241
$69,674.12
NATIONAL STEAK PROCESSORS #2
301 E 5TH
OWASSO
OK
74055
$124,547.03
NEWFIELD EXPL MID-CONTINENT IN
ONE WILLIAMS CTR STE 1900
TULSA
OK
74172
$57,619.14
NORTH AMERICAN PETRO CORP USA
1335 W CAUSEWAY APPROACH
MANDEVILLE
LA
70471
$32,439.35
OCEAN DENTAL CORP OFFICE INC
206 W 6TH AVE
STILLWATER
OK
74074
$24,870.79
OFFICE MAX INC #1
150 E PIERCE RD
ITASCA
IL
60143
$468,740.48
OFFICE MAX INC #2
150 E PIERCE RD
ITASCA
IL
60143
$470.32
OKLA DEPT OF COMMERCE
6601 BROADWAY EXT STE 200
OKLAHOMA CITY
OK
73116
$16,000.00
ORTHOCARE INNOVATIONS LLC
800 RESEARCH PKWAY STE 310
OKLAHOMA CITY
OK
73104
$48,423.92
PACCAR INC #2
750 HOUSER WAY NORTH
RENTON
WA
98055
$2,823.54
PAETEC COMMUNICATIONS INC
400 WILLOWBROOK OFFICE PARK
FAIRPORT
NY
14450
$465,519.07
PELCO STRUCTURAL LLC
1501 INDUSTRIAL BLVD
CLAREMORE
OK
74017
$207,219.64
PETRA INDUSTRIES INC
2101 S KELLEY AVE
EDMOND
OK
73013
$66,167.24
PLIANT CORP
1 EDISON DR
MCALESTER
OK
74502
$4,838.58
POWER COSTS INC
3550 W ROBINSON STE 200
NORMAN
OK
73072
$171,246.60
PRIMARY NATURAL RES III LLC
7134 S YALE STE 430
TULSA
OK
74136
$2,787.00
PRYOR CHEMICAL CO
16 S PENNSYLVANIA
OKLAHOMA CITY
OK
73107
$221,954.27
QUARTER TURN RESOURCES INC
3505 W NORTH AVE
PONCA CITY
OK
74601
$59,768.35
QUESTAR EXPLOR & PROD CO
PO BOX 45601
SALT LAKE CITY
UT
84145
$243,990.99
RUHRPUMPEN INC
4501 S 86TH ST EAST AVE
TULSA
OK
74145
$167,625.83
SAMSON INVESTMENT CO #2
TWO WEST SECOND ST
TULSA
OK
74103
$139,119.80
SAMSON RESOURCES CO #2
TWO WEST SECOND
TULSA
OK
74103
$409,249.82
SAMSON RESOURCES CO #3
2 W 2ND ST SAMSON PLAZA
TULSA
OK
74103
$39,102.53
SANDRIDGE OPERATING CO
PO BOX 548807
OKLAHOMA CITY
OK
73154
$3,356,940.99
SELECT ENGINEERING INC
1717 S BOULDER STE 600
TULSA
OK
74119
$44,420.53
SERVICE KING MFG INC
PO BOX 158
STROUD
OK
74079
$232,233.26
SGS NORTH AMERICA INC
PO BOX 548
BARTLESVILLE
OK
74005
$340,410.53
SHAW TULSA FABRICATORS INC #2
4171 ESSEN LANE
BATON ROUGE
LA
70809
$763,627.70
SIGMA PROCESSED MEATS INC
701 E GOODHOPE RD
SEMINOLE
OK
74868
$291,362.61
SIMONTON BUILDING PROD INC
1 COCHRANE AVE
PENNSBORO
WV
26415
$172,913.16
SITEL OPERATING CORP #1
3102 W END AVE STE 900
NASHVILLE
TN
37203
$231,112.54
SITEL OPERATING CORP #2
3102 W END AVE STE 900
NASHVILLE
TN
37203
$328,373.13
SOUTHERLAND INC
PO BOX 70129
NASHVILLE
TN
37207
$15,138.72
SPIRIT AEROSYSTEMS INC
3330 N MINGO
TULSA
OK
74158
$2,401,439.81
SPRINT SPECTRUM LP/T BUSCHERT
7900 COLLEGE BLVD
OVERLAND PK
KS
66210
$1,710,997.64
STAR-TEK USA
111 HAVANA ST
AURORA
CO
80010
$236,057.86
STATE INCOME TAX OBO DURANT DC
300 PHILLIPI RD
COLUMBUS
OH
43228
$472,102.6131
STONEHENGE PARTNERS INC
401 S BOSTON AVE STE 400
TULSA
OK
74103
$10,335.22
SVC MANUFACTURING INC
3500 MAIN ST MAIP
PRYOR
OK
74361
$187,253.45
T D WILLIAMSON INC
5727 S LEWIS AVE STE 300
TULSA
OK
74105
$146,747.34
TECHNOLOGY DEVELOPMENT GRP INC
41901 WOLVERINE RD
SHAWNEE
OK
74804
$490.77
THE CROSBY GROUP INC
2801 DAWSON RD
TULSA
OK
74110
$16,871.39
THE PROF BASKETBALL CLUB LLC
211 N ROBINSON 3RD FLR
OKLAHOMA CITY
OK
73102
$5,281,777.51
THERMA TRU CORPORATION
601 PAW PAW ROAD
ROLAND
OK
74954
$61,038.86
THERMAL ENGINEERING INTL USA I
2110 N INDUSTRIAL DR
SAPULPA
OK
74066
$2,326.21
TIGER TRUCK MANUFACTURING LLC
100 TIGER DR
POTEAU
OK
74953
$89,252.16
TITAN TANKS & VESSELS LLC
PO BOX 321
GAINESVILLE
TX
76241
$396,947.55
TORNADO ALLEY TURBO INC
1060 W MAIN
OKLAHOMA CITY
OK
73120
$26,853.88
TRACKER MARINE LLC
3807 TAHOE WAY
MIAMI
OK
74354
$303,939.18
TRISTAR GLASS INC
5566 S GARNETT
TULSA
OK
74146
$55,603.24
TRITON SCIENTIFIC LLC
PO BOX 1902
PONCA CITY
OK
74602
$109,641.82
TULSA COMBUSTION LLC
5416 S 49TH W AVE
TULSA
OK
74107
$27,327.57
UNIT CORP
7130 S LEWIS STE 1000
TULSA
OK
74170
$17,017.48
UNITED HEALTHCARE SERV INC
9900 BREN RD E MN008-E305
MINNETONKA
MN
55343
$362,209.86
UNITED RECOVERY SYSTEMS LP
6506 S LEWIS AVE STE 260
TULSA
OK
74136
$214,616.09
UNITED STATES CELLULAR CORP #2
4700 S GARNETT STE 100
TULSA
OK
74146
$56,960.19
VALLEY TIMBERS LC
PO BOX 129
ANTLERS
OK
74523
$36,085.81
VANGUARD CAR RENTAL USA INC
6929 N LAKEWOOD
TULSA
OK
74117
$676,264.75
VENTURA REFINING & TRANSMISSIO
301 NW 63RD ST STE 320
OKLAHOMA CITY
OK
73116
$28,417.95
VICTORY ENERGY OPER LLC
10701 E 126TH ST N
COLLINSVILLE
OK
74021
$66,327.86
WAL-MART STORES EAST LP
1301 SE 10TH ST
BENTONVILLE
AR
72716
$1,437,582.97
WEATHERNEWS AMERICA INC
350 DAVID BOREN BLVD STE 1000
NORMAN
OK
73072
$157,943.93
WELLMAN PRODUCTS LLC
1110 W TENKILLER RD
CATOOSA
OK
74015
$250,892.90
WEST BUSINESS SERV LLC #1
11808 MIRACLE HILLS DR
OMAHA
NE
68154
$650,203.03
WEST BUSINESS SERV LLC #2
11808 MIRACLE HILLS DR
OMAHA
NE
68154
$13,389.58
WILLBROS ENGINEERS (US) LLC
2087 E 71ST ST
TULSA
OK
74136
$41,424.66
WILLIAMS COMPANIES
ONE WILLIAMS COMPANY MD 48
TULSA
OK
74172
$478,133.89
YUBA HEAT TRANSFER LLC
2121 N 161ST EAST AVE
TULSA
OK
74116
$9,794.97
ZEECO INC
22151 E 91ST ST
BROKEN ARROW
OK
74014
$317,397.16
ZELEDYNE LLC
17333 FEDERAL DR STE 230
ALLEN PARK
MI
48101
$1,226,927.70
$54,011,640.39
Source: Oklahoma Tax CommissionAppendix E - Senate Bill 1267
Many Oklahoma credits available against corporate and individual income taxes will be subject to a
two-year moratorium from July 1, 2010, through June 30, 2012. The credits otherwise authorized may not be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010, for which the credits would otherwise be allowable. However, beginning July 1, 2012, the credits may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the applicable statutory provisions.
27A O.S. § 2-11-303 -Credit for Hazardous Waste Control
68 O.S. § 2357 - Gas Used in Manufacturing Credit
68 O.S. § 2357.4 - Oklahoma Investment/New Jobs Credit
68 O.S. § 2357.6 - Credit for Energy Assistance Fund Contribution
68 O.S. § 2357.11 - Coal Credit
68 O.S. § 2357.25 – Oklahoma Agricultural Producers Credit
68 O.S. § 2357.26 - Credit for Employers Providing Child Care Programs
68 O.S. § 2357.27 - Credit for Entities in the Business of Providing Child Care Services
68 O.S. § 2357.30 - Small Business Guaranty Fee Credit
68 O.S. § 2357.32A - Credit for Electricity Generated by Zero-Emission Facilities
68 O.S. § 2357.32B - Credit for Manufacturers of Small Wind Turbines
68 O.S. § 2357.33 - Credit for Food Service Establishments that Pay for Hepatitis A Vaccination for their Employees
68 O.S. § 2357.41 - Credit for Qualified Rehabilitation Expenditures
68 O.S. § 2357.46 - Credit for the Construction of Energy Efficient Homes
68 O.S. § 2357.47 - Credit for Modification Expenses Paid for an Injured Employee & Credit for Wages Paid to an Injured Employee
68 O.S. § 2357.59 - Credit for Qualified Recycling Facility
68 O.S. § 2357.66 - Credit for Qualified Ethanol Facilities
68 O.S. § 2357.67 - Credit for Qualified Biodiesel Facilities
68 O.S. § 2357.81 - Oklahoma Local Development and Enterprise Zone Incentive Leverage Act Credit
68 O.S. § 2357.100 - Poultry Litter Credit
68 O.S. § 2357.101 - Film or Music Project Credit
68 O.S. § 2357.102 - Dry Fire Hydrant Credit
68 O.S. § 2357.104 - Credit for Railroad Modernization
68 O.S. § 2357.203 - Credit for Breeders of Specially Trained Canines
68 O.S. §§ 2357.302 & 2357.303 - Credits for Employers in the Aerospace Sector
68 O.S. § 2357.304 - Credit for Employees in the Aerospace Sector
68 O.S. § 2370 - Credit for Financial Institutions Making Loans under the Rural Economic Development Loan Act
68 O.S. § 2370.3 - Credit for Stafford Loan Origination Fee
68 O.S. § 54006 - Research and Development New Jobs Credit
Note: See House Bill 3024 for additional amendments to some of the credits listed above.
House Bill 3024
Amends the moratorium on the Investment/New Jobs Credit found in Senate Bill 1267. The amendment provides that an Investment/New Jobs Credit can be established during the moratorium period of July 1, 2010 through June 30, 2012. The credits established during this period will accrue and may not be claimed until tax year 2012. 68 O.S. § 2357.4
Establishes a sunset date for the Credit for Investment in Qualified Electric Motor Vehicle Property. No credit will be allowed for investments in qualified electric motor vehicle property placed in service on or after July 1, 2010. 68 O.S. § 2357.22
32 Establishes a credit for the manufacturer of low-speed electric motor vehicles, medium-speed electric motor Vehicles or electric motor vehicles which are manufactured after June 30, 2010. The manufacturer must have a manufacturer exemption permit pursuant to Title 68 O.S. § 1359.2.
The credit will be as follows:
 For low-speed electric motor vehicles the credit is $500 per vehicle manufactured.
 For medium-speed electric motor vehicles the credit is $1,000 per vehicle manufactured.
 For electric motor vehicles, which are not low-speed or medium-speed vehicles, the credit is $2,000 per vehicle manufactured.
Any credit allowed but not used will have a five year carryover provision. 68 O.S. 2357.402 (new law)
Senate Bill 1590
A moratorium has been placed on the Small Business Capital Credit and the Rural Small Business Capital Credit. The moratorium shall be in effect for investments made on or after June 1, 2010 through December 31, 2011. 68 O.S. §§ 2357.62, 2357.63, 2357.73, 2357.74, 2361a (new law) & 2372a (new law)
House Bill 2519
Extends for two years the expiration date of the Coal Credit from tax years ending on or before December 31, 2012 to tax years ending on or before December 31, 2014. 68 O.S. § 2357.11
Amends the Credit for Investment in a Clean-Burning Motor Vehicle Fuel Property. The tax credit for a vehicle originally equipped, or modified, to be propelled by a hydrogen fuel cell is only available for tax year 2010. The credit for property directly related to the delivery of a hydrogen into the fuel tank of a motor vehicle or a storage tank is only available for tax year 2010. 68 O.S. § 2357.22
Amends the moratorium on the Credit for Electricity Generated by Zero-Emission Facilities found in Senate Bill 1267. Reduces the moratorium by one-year, from June 30, 2012 to June 30, 2011. The amendment also provides that the Credit for Electricity Generated by Zero-Emission Facilities can be established during the moratorium period of July 1, 2010 through June 30, 2011; however, any credits established during this period will accrue and may not be claimed until tax year 2012. 68 O.S. § 2357.32A
Amends the moratorium on the Credit for Qualified Rehabilitation Expenditures found in Senate Bill 1267. The amendment provides that Credit for Qualified Rehabilitation Expenditures can be established during the moratorium period of July 1, 2010 through June 30, 2012; however, any credits established during this period will accrue and may not be claimed until tax year 2012. 68 O.S. § 2357.41
Source: Oklahoma Tax Commission
33

2010 Report
Of the
Incentive Review Committee
Submitted to:
The Honorable Mary Fallin
Governor of the State of Oklahoma
The Honorable Brian Bingman
President Pro Tempore
Oklahoma State Senate
The Honorable Kris Steele
Speaker
Oklahoma House of Representatives
The Honorable Jeffrey Hickman
Speaker Pro Tempore
Oklahoma House of Representatives
April 29, 2011Table of Contents
Cover Letter to the Governor, State Senate & House of Representatives……….. 3
I. Introduction & Committee Background…………………………………………….. 4
II. Incentives Reviewed in 2010
Insurance Premium Tax Credit………………………………………………... 5
Quality Jobs and Related Programs………………………………………….. 8
Other States Quality Jobs Type Programs and Relevant Matters………… 11
III. Principles of Sound Tax Incentives……………………………………………….. 12
IV. Committee Recommendations……………………………………………………. 14
Appendices:
Appendix A “Oklahoma Incentives List” ……………………………………………… 15
Appendix B “Other States Quality Jobs & Closing Fund Type Programs”……….. 23
Appendix C “Notes on Quality Jobs Program”…………………………………...….. 26
Appendix D “Quality Jobs Rebate Payments - 2010”……………………………….. 29
Appendix E “Credits Under Moratorium” …………………………………………….. 32
2 April 29, 2011
To: The Honorable Mary Fallin
Governor
The Honorable Brian Bingman
President Pro Tempore
Oklahoma State Senate
The Honorable Kris Steele
Speaker
Oklahoma House of Representatives
The Honorable Jeffrey Hickman
Speaker Pro Tempore
Oklahoma House of Representatives
Dear Governor Fallin, Senator Bingman and Representatives Steele and Hickman:
The Incentive Review Committee (IRC) has taken the charge delegated to the committee by Senate Bill 1516 enacted during the 2004 legislative session to select a specific tax type each year and conduct a thorough analysis of specific tax preferences within that tax.
In 2010, the committee studied several insurance premium tax credits and other incentive programs. In addition, the committee heard information from several individuals regarding the purposes and uses of these credits. The following report outlines the findings of the IRC.
Respectfully Submitted,
Douglas Branch
Bruce Crum
Robert Dauffenbach, Ph.D.
Jonathan Forman
Michael Laird
William Lohrey
Mark Snyder
Larkin Warner, Ph.D.
Don Wood
3 I. Introduction & Committee Background
In the summer of 2003, Governor Brad Henry convened the Economic Development Generating Excellence (EDGE) Commission to examine issues facing Oklahoma across the economic and political landscape and recommend a plan of action to address those issues. One of the recommendations of the team that was adopted into the formal EDGE Action Plan was as follows:
“Putting in place a system to quantify the costs and benefits of existing incentives and tax credits. The state should systematically quantify the costs and benefits of all current and proposed business incentives and tax credits to determine whether they effectively encourage the type of business behavior they seek to stimulate.”
As a result of this recommendation, the Oklahoma State Legislature enacted Senate Bill 1516 (SB1516) in the 2004 legislative session. SB1516 created the Incentive Review Committee (IRC) and charged it with conducting a review of existing tax incentives in Oklahoma. To this end, the bill directs the IRC to annually select a particular section of State tax code, and within that code to choose which incentives it will review in the given year. The review is required to include the following information.
1. An identification of the purpose of the tax incentive;
2. A determination of whether the potential revenue impact on the state can be quantified and if so, an estimate of the potential revenue impact on the state;
3. A determination of whether the economic gain to the state can be quantified and if so, an estimate of the economic gain measured in jobs, wages, investments, or other economic criteria;
4. An estimate of the effect on the distribution of the tax burden;
5. An estimate of the number of taxpayers receiving the benefit;
6. A determination of the growth potential of the industry eligible to claim the incentive;
7. A determination of the effectiveness in achieving the desired objective;
8. A determination of whether the tax incentive is the most fiscally effective means of achieving its stated purpose;
9. An analysis of the costs and burdens of administration;
10. An analysis of the competitive position of Oklahoma relative to other states with similar incentives;
11. A determination of the effectiveness of evoking a change in taxpayer behavior; and
12. A public hearing, at which persons receiving the incentives reviewed, or other interested parties, may testify.
4 II. Incentives Reviewed in 2010
During 2010, the IRC reviewed the following two incentives considering the 9 Principles of Sound Tax Incentives listed in Section III of this report when at all possible. Appendix A to this report is the committee’s list of Oklahoma Incentives.
1. Insurance Premium Tax Credit (36 O.S. §625.1)
The committee asked for data which reflect the various credits against the insurance premium tax. A report by the Oklahoma Insurance Department showed the following credits were made against the insurance premium tax for calendar years 2008 & 2009:
Oklahoma Insurance DepartmentPremium Tax Collections and CreditsCY 2008CY 2009Premium Tax Collected159,259,893162,705,426Refunds9,657,2397,312,869Net Premium Tax Collected149,602,654155,392,557Credits Taken PSA**3,031,5183,488,809 Flood**3,230,5873,870,639 Life Guaranty1,185,4651,365,066 P&C Guaranty9,963,1799,533,975 Coal10,149,0766,007,014 Home Office12,512,89314,673,798 Rural Business3,924,4304,850,061 Small Business8,215,7219,779,735 Historical Building Rehab4,654,42110,607,699 Venture Capital1,045,904414,300 Franchise Tax262931Total Credits Against Premium Tax57,913,45664,592,027** PSA and Flood Premiums are taken directly from Direct Written Premium prior to premium tax being assessed. Therefore, they are shown as the amount that premium tax collections are reduced by their use. PSA Premiums CY 2008 $134,734,138.22 *2.25% = $3,031,518 CY 2009 $155,058,189.62 *2.25% = $3,488,809Flood Premiums CY 2008 $143,581,665 *2.25% = $3,230,587 CY 2009 $172,028,393.94 *2.25% = $3,870,638.86Source: Oklahoma Insurance Department
5
More detailed descriptions for the credits taken against the Insurance Premium Tax are listed below:
A. Life and Health Guaranty Fund Credit (per 36 O.S. § 2030 (i))—This credit is 20% for 5 years per year of assessment made. There is no year limitation on this credit. The credit must be used or lost in the year given. Cannot be carried forward. In the event an insurance company should cease doing business, all the accumulative credit will be allowed in the year the company ceases doing business. If a merger occurs, then the credit will follow the succeeding insurance company. The Life Guaranty Association issues a disc or email to the financial division with the information each year around January 1st. The file will contain the amount of the credit allowed for that year by the company. This assessment is on all life, health and annuity companies. Some companies have annuities not assessed and are only charged a flat $150. The credit can be a refund or negative number. This will only be taken on the tax return and not during the year on estimated payments. It must come out first and prior to any other credit initiated. Must come before pension. Cannot be refunded.
B. Property and Casualty Guaranty Fund Credit (per 36 O.S. § 625.4)—This credit is from the P&C assessment made by the Guaranty Association each year. It is 10% of the base assessment by year for 10 years. There is no time limitation on this credit. This credit may be carried forward to the future years and needs to be tracked for the overage remaining. This credit can be transferred. A separate report will need to by queried and sent to the Association for the remaining credit not taken in the year granted. An email will be sent to the financial division each year around January 1st for downloading to the AS400. It will contain the exact amount of credit and/or refund. A refund or negative number will need to remain with the return and have taxes assessed. The amount of overage left will need to be added to next years’ number that comes from the association. A separate line will be needed under the assessment for carry-forward. This will only be taken on tax return and not during the year on estimated payments. It must come out first and prior to any other credit initiated after the life credit. Must come before pension. Cannot be refunded.
C. Small Business Capital Credit (per 68 O.S. § 2357.62)—A small business credit for qualified investments in small business beginning for taxable years after December 31, 1997 and before January 1, 2012. The credit comes from the tax imposed under 624 and 628, meaning annual premium tax reporting and retaliatory tax. The credit may be carried forward for a period not to exceed 3 taxable years. Any company claiming this 20% off cash investment reported on Form 526 from the tax commission must produce form 526. The credit must be claimed in the year received and carried forward. We have told companies in the past they may not deduct any amount from the items of fire marshal tax, retaliatory tax, and fees. This would be an exception allowed and would be entered against retaliatory. The credit must be claimed in the year received and carried forward. A report needs to be given to the tax commission. Cannot be refunded only carried forward. Taken before pension. Allowance of the credit as estimated payments will avoid refunds later, but the statute is silent.
D. Coal Credit (per 68 O.S. § 2357.11)—Credit is allowed from January 1, 1993 and ending on or before December 31, 2012. Any credit not used may be carried forward 5 years following the year of qualification. This credit can be used against annual taxes, as a prepayment, or against retaliatory taxes. These credits are purchased by the insurance companies from coal producing energy companies via a transfer through the tax commission. Form 572 will accompany any transfer of credit and must be submitted as proof. A report needs to be given to the tax commission. Cannot be refunded only carried forward. Taken before pension.
E. Historic Buildings Rehabilitation Credit (per 68 O.S. § 2357.41)—Can be taken against premium tax or retaliatory tax beginning December 31, 2000. No refund on credit.
6 The credit may be carried forward for 10 years following the qualified expenditures.
Credit is transferable for 5 years following expenditure. The tax commission will issue a form 572 as proof. We will allow the credit to be applied to estimated payments to avoid refunds although the statute is silent on this matter. Taken after pension.
F. Investments in Rural Small Business Capital Companies (per 68 O.S. § 2357.73)—Beginning December 31, 2000 and ending December 31, 2011 a credit for qualified investment in qualified rural small business capital companies will be allowed for tax imposed under 624 and 628, meaning annual premium tax and retaliatory tax. May be used towards quarterly tax payments. A form from the tax commission will accompany the return as proof. An amount equal to 30% of cash investment in a capital company. The credit may only be claimed in the year the company invests funds and transferred to others. The credit may be carried forward for a period not to exceed 3 years. Not refunded and taken before pension. A report needs to be sent to the tax commission annually.
G. Co-Investments in Rural Small Business Capital Companies (per 68 O.S. § 2357.74)—Same as Credit for Investments.
H. Home Office Credit (per 36 O.S. § 625.1)—This credit is for insurance companies that have established a home office in the state of Oklahoma. The qualifications can be found in the above referenced statute. The credit is based on number of full time employees and whether the insurance company is a foreign or domestic. This credit may only be taken at year end and after the pension of 57.1% is deducted and all other credits are deducted due to the statute stating it is only for monies actually paid to the General Revenue Fund of the state, not including tax monies placed in pension funds or in escrow. It may only be deducted against taxes imposed under 624 (premium tax). Foreign Companies having applied with the department and established a home office are eligible for a 15% credit for 200-299 employees; a 25% credit for 300-399 employees; a 35% for 400-499 employees; and a 50% credit for 500 plus employees. The credit is based on the tax due less the portion that belongs to the pension of 57.1% times the % allowed. (See Home Office Worksheet). Domestic companies are allowed 35% for 400-499 employees and 50% for 500 plus employees. A company may re-domesticate and keep its foreign deduction as in (A) of the statute. This is only for the tax year and may not be carried forward.
I. Venture Capital Credit (per 68 O.S. § 2357.74)—Credit from December 31, 2000 to December 31, 2011. This credit must follow all credits including the home office credit due to it being 100% of the credit after all other credits per the above statute. It may be carried forward for a period not to exceed 3 taxable years. Must be deducted after the pension fund of 57.1%. Tax Commission will provide a form for proof of credit.
J. PSA (Public Service Authority) Credit (per 36 O.S. § 624 (A-2)—This credit is taken directly from premium written and is not a tax credit, but rather a direct premium written credit. 100% of all premiums written for a public service authority (with proof by listing the amount, name, address, contact person, and phone number of the PSA). A PSA is any county, city, town, school district, or authorities performing a public service under Title 74: 1001-1008 and Title 60: 176-180.4.
K. Flood (Crop & Flood) Credit - Federal credit
Source: OK Insurance Department
7 2. Quality Jobs and Related Programs
The committee heard a presentation from the Oklahoma Department of Commerce on the Quality Jobs, Small Employer Quality Jobs and 21st Century Quality Jobs programs. The committee also reviewed the March 2011 Triennial Reports of the Oklahoma Department of Commerce on the Quality Jobs and 21st Century Quality Jobs programs. Below is a summary of these programs.
Quality Jobs:
Overview:
The Quality Jobs Program serves as an incentive to businesses to expand or locate within Oklahoma and create new taxable payroll within the state. Participants may qualify for a cash rebate of up to 5% over a ten-year period on new taxable payroll.
Purpose:
• Creation of jobs in targeted and higher wage industries
• Designed to fulfill the overarching economic development goal of raising the living standards of the state’s citizens
In FY 2009, the Oklahoma Quality Jobs Program rebates totaled $60,548,225 as compared to $63,339,981 in 2008. The breakdown is as follows:
Application Process:
1. Sales Phase
a. Visit with Prospect
b. Complete Incentive Analysis Request (IAR) Form and deliver completed to Business Location or Business Solutions Division
c. Ensure Project is entered in Customer Relationship Management DataBase (CRM) and deliver to Research & Policy Division
d. Research & Policy Division generates Incentive Analysis (Marketing Version) and returns to Business Location or Business Solutions
e. Deliver and discuss options with prospect or existing company advising where needed
f. If accepted, begin Step 2. If not accepted, return to Step 1a.
8
Program
FY 2008
FY 2009
Quality Jobs
$62,080,930
$59,071,458
Small Employer Quality Jobs
$1,259,051
$1,476,767
21st Century Quality Jobs (New 2009)
$0
$0
Totals
$63,339,981
$60,548,225
Source: Oklahoma Department of Commerce 2. Application/Info Gathering Phase (In-State Company)
a. Business Location or Business Solutions Division provides application and written process overview to the company helping them initiate and submit signed application. Date stamp and create protected E-file with all documents related to application.
b. Work with company to gather required information and submit to e-file (using checklist)
c. Certify to Quality Jobs Division that all documents and information are complete and accurate. Formally introduce QJ Division contact who reviews checklist and determines if all documents are complete.
d. If complete, begin Step 3. If not complete, return to Step 2b.
Application/Info Gathering Phase (Out-of-State Company)
e. Provide application and written process overview to the company; Hand-off to Quality Jobs Division in formal introduction.
f. Quality Jobs Division initiates and submits signed application with date stamp an protected E-file (containing all documents related to the application)
g. Quality Jobs Division works with company to gather required information and submits the e-file (using checklist)
h. Quality Jobs Division reviews checklist and determines if all documents are complete and accurate.
i. If complete, begin Step 3. If not complete, return to Step 2g.
3. Commerce Review Team (CRT) Review Phase
a. Research & Policy Division generates final, complete incentive analysis; Hand-off to Quality Jobs Division
b. Quality Jobs Division validates application & supporting documents providing feedback to company and Quality Jobs Representative via e-mail; then provides E-packet via Virtual CRT to Business Location or Business Solutions Division.
c. General Counsel, Quality Jobs and Research & Policy Divisions also review E-packet via Virtual CRT.
d. CRT issues are received and resolved by all divisions
e. CRT meeting is scheduled, convened and held (Step 4)
4. Contracting Phase
a. Quality Jobs Division prepares minutes and documentation. General Counsel writes contract and submits to the Secretary of Commerce. If an Incentive Approval Committee (IAC) is deemed necessary, move to Step 4b, if not move to Step 4c.
b. Convene and hold Public IAC Meeting
c. If approved, Secretary of Commerce signs contract and notifies Quality Jobs Representative to send approved contract to company. Move to Step 4e.
d. If not approved, send denial letter and notify Quality Jobs Representative.
9 e. Company signs contract and returns to Quality Jobs Division.
f. Quality Jobs Division delivers signed contract to OK Tax Commission (OTC) and keeps copy.
g. General Counsel notifies QJ and ED Representatives signed contract has been receives, finalizes file and drafts congrats letter to company and copies Legislature and Secretary of Commerce.
h. Quality Jobs Division and General Counsel work with Marketing Division to prepare Press Data and coordinate announcements and celebration with the company.
Measurements:
• Since 2008, there have been 89 companies enrolled in the program.
• Since 2008, the total number of projected jobs created by the program is 18,657.
• The average QJ wage rate in 2008 was 23% higher than state average wage.
Source: Oklahoma Department of Commerce Note: Print this chart in color to see both lines
Evolution:
 Addition of Average Wage
 Recognizes dynamic wage rates with annual review of county averages and state index. Initially set at $25,000; indexed annually using BEA data. Currently $29,409
 Disadvantaged Geographies
 Targets counties or opportunity zones by setting adjusted wage levels
 Expanded Industries
 New industries regularly included to meet changing OK economy
 Multiple Contracts
 Encourages business growth while ensuring that primary contract responsibilities are met
 6% Net Benefit Option
 Allows a participating company to apply for a 2nd QJP contract and receive up to 6% if the average wage of new jobs are 150% of current jobs
 Change in Control
 Allows consideration for change in ownership or high-risk relocation, with higher future commitment from company
10 Small Employer Quality Jobs:
• Effective 1/1/1998
• Targeted to small businesses (90 employees or less)
• Up to 5% cash rebate of taxable wages for up to 7 years
• New job requirements are based on population
• Companies in counties over 200,000 are excluded, except in Opportunity Zones
• Wage requirements are adjusted for the average of small businesses in the county
21st Century Quality Jobs:
• Effective 11/1/2010
• Intended to promote impactful, high wage, high skill jobs without competing with existing incentives
• Expands qualifying industries up the value chain of current assets
• Qualifying average wage of new jobs is 300% of the county average or 300% of the average of OK county wages, currently $94,418
• Participants may receive up to a 10% Net Benefit Rate once they create at least 10 new jobs at higher average wage
3. Other States Quality Jobs Type Programs
The committee reviewed what other states are doing similar to Oklahoma’s Quality Jobs Program. (See Appendix B to this report.)
4. Other Quality Jobs Program Notes
The committee reviewed Dr. Larkin Warner’s study notes on the Quality Jobs Program (See Appendix C to this report.)
The committee reviewed the Oklahoma Tax Commission’s Quality Jobs Incentive Payment Report FY10 (See Appendix D to this report.)
5. Other Relevant Matters
The committee noted that the legislature acted in 2010 to impose a two-year moratorium on many of the Oklahoma tax credits (See Appendix E to this report.)
The committee also reviewed the Oklahoma Tax Commission’s State of Oklahoma Tax Expenditure Report 2009-2010.
The committee also reviewed Oklahoma Attorney General Opinion No. 2010-16 (issued on December 20, 2010). Of note, that opinion declares (at p. 3) that:
To be Constitutional, Economic Development Tax Credits must:
1. Serve a Public Purpose,
2. Be Supported by Adequate Consideration, and
3. Have Adequate Controls and Safe Guards.
11 III. Principles of Sound Tax Incentives
A review of the literature on economic development incentives provides a basis for identifying various principles that are widely agreed to. These principles can be used to guide the specification of a new program. They can also be used as a means for evaluating an existing program. Below we list 9 principles that the committee deems as important.
Principle 1. The costs of the incentive system should be less than the benefits.
Too often, we consider only the benefits, not the costs. Too often, we view the effect of incentives in a partial equilibrium sense, not general. For example, a highly successful incentive program might raise the cost of doing business for firms not receiving the incentive, necessitating a reduction in employment. States with balanced budget requirements must recognize that less revenue from one source creates greater burdens on existing firms and citizens. Similarly, when estimating the benefits and costs of an incentive program, the time value of money should be considered. That is, if the benefits of an incentive all occur many years in the future, the current benefit is significantly lessened and this impact must be accounted for in estimates of both costs and benefits.
Principle 2. An individual incentive program should fit well within the broad strategic framework of state economic objectives.
Individual programs should fulfill at least one key role in a broad portfolio of state economic development policy initiatives that focus on business attraction, business retention, new business start-up, high technology, efficient land use, geographic balance, and training to improve productivity. In addition, the state's objectives include a tax system characterized by equity and distributive justice. An overarching consideration in the choice and design of economic development incentives is the need to compete effectively with other jurisdictions which also offer incentives. Tax incentives for economic development are inherently selective and not available to all competitors within an industry (see Principle 4 below). To the extent possible, tax incentives should have minimum negative impacts on existing competitors unable to take advantage of the incentives' benefits.
Principle 3. The objectives of the program should be clearly identified.
Incentive programs have as their purposes (a) expansion of business activity that exports outside the regional economy, (b) substitution for imports to the regional economy, (c) increased productivity, (d) improved resource utilization, i.e., reduction of unemployment and underemployment. Just how a program is going to yield specific results should be clearly specified.
Principle 4. Incentive programs should be targeted to firms where the program will clearly make a difference.
Firms are not equal in their ability to contribute to the economic well-being of a region, as is evident by substantial variation in industry output, income, employment multipliers and emerging sectors wherein special competencies and competitive advantages rooted in regional research experience exist.
This is a basic fact of economic expansion that needs to be heeded. Targeting may also be necessary in order to compete with incentives offered by other jurisdictions.
12 The epitome of targeting is a “deal-closing” fund which is used by many jurisdictions to provide the marginal difference to a business making the location decision. “Deal-closing” funds are commonly used to create incentives to create or retain jobs by defraying costs for infrastructure, employee training or tax incentives.
Carefully administered targeting programs can reduce the overall cost to a state of its incentive programs. Targeting can avoid turning economic development incentives into generalized business “entitlements” which cost the state money but which do not change the behavior of business firms and thus do not promote economic development.
Principle 5. Incentive programs should be neutral with respect to the types of industries that qualify for the program.
Service industries are dominating growth in US businesses. If a firm’s application meets the tests of export expansion, import substitution, or other enhancements to resource utilization, it should not matter what industry the firm is identified with.
Principle 6. Incentive programs should have built-in evaluation mechanisms.
Without the capability to evaluate the benefits and costs of a program, there is little or no rationale for undertaking the program in the first place. Evaluation programs and generation of the appropriate data sources for evaluation need to be specified before the program is undertaken. The evaluation process needs to be followed closely according to plan.
Principle 7. Incentive programs should have sunset provisions and other features that enhance accountability.
Sunset provisions focus attention on the evaluation process and outcomes, and, thus, should be components of these programs. Industry is probably more mobile now than it has ever been, historically. Economic development initiatives should not fall into the trap of attempting to attract footloose industries and other copy-cat initiatives.
Principle 8. Incentive systems should be based on rules versus discretion.
Basing decisions on who gets incentives on a set of well-defined guidelines of eligibility is imperative to the ultimate potential for favorable evaluation.
Principle 9. Incentive systems using tax credits should seek to maximize the dollars flowing to the intended purpose.
Those incentive systems that utilize tax credits should consider the costs of those tax credits to the State and seek to structure credits in a manner that will maximize the dollars flowing to the intended purpose per dollar of state expenditures on the tax credit. Thus, all tax credits should be designated as directly transferable, given that (i) even when designated to be "non-transferable" by the enabling legislation, the benefits of tax credits can be bought and sold nonetheless, and (ii) the derivative transfers of non-transferable tax credits significantly increases the costs to the State thereby decreasing the overall economic benefit to Oklahoma.
13
IV. Committee Recommendations
The Incentive Review Committee wishes to work with the current legislature to develop a review process that provides the legislature with the information they want and can use.
After reviewing the incentives listed in Section II of this report, the committee states the following:
1. The purpose of each credit/incentive (both current and future) should be clearly defined in the legislation.
2. The committee believes that economic development tax credits should serve a public purpose, be supported by adequate consideration, and have adequate controls and safe guards.
3. The committee recommends the Oklahoma Department of Commerce and the Oklahoma Tax Commission work together to determine the necessary data required from Quality Jobs rebate recipients for measuring the success of the program and to put in place procedures for the periodic collection of such data. Furthermore, the committee would ask to be advised if any change in current law would be required to achieve this objective.
4. After review of the Quality Jobs Program, the committee recommends retention of the program as an important economic development tool.
14 Appendix A - Oklahoma Incentives List
Sources: OK Department of Commerce, OK Tax Commission, openbooks website and OK Insurance Dept. Effective: 4/26/2011
*This amt. is the OID credit remainder after known credits are put in their respective rows. 15
Incentive
Type
Statute/ Source
Sunset Date
Transferable
2009 OTC 511 cr
2009 OTC # of credits
2009 OID credits
Total 2009 credits taken
Total 2008 Credits Taken
Total 2007 Credits Taken
IRC Review Year/Status
OK Quality Jobs Program (21st Century QJ started in 2010 - no results yet)
Cash Payment
68 O.S. §§ 3601 et seq.
$59,071,458
$62,080,930
$53,391,293
2008 & 2010 Heard presentation
*Insurance Premium Tax Credit (Includes Home Office, PSA, Flood, Life & P&C Guaranty & Franchise Tax)
Insurance Department
36 O.S. § 625.1 (OID)
$32,933,218
$32,933,218
$29,923,904
$30,801,386
2008-2009-2010 (collected data)
Small Business Capital Formation Tax Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.60 - .65
12/31/2011
$3,623,763
193
$9,779,735
$13,403,498
$22,039,574
$15,294,701
2009 Review - 8/26/09 / 2007 Report
Rural Small Business Capital Formation Tax Credit
Income Tax Credit/ Exemption
68 O.S. §§ 2357.73 et seq.
12/31/2011
$7,905,428
353
$4,850,061
$12,755,489
$69,427,484
$57,776,877
2009 Review - 8/26/09 / 2007 Report
Qualified Rehabilitation Expenditures Tax Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.41
YES
$194,840
9
$10,607,699
$10,802,539
$6,296,255
$5,060,376
2008-2009 - No action at this time
Investment in qualified electric car
Income Tax Credit/ Exemption
$7,330,711
1,043
$7,330,711
Coal Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.11
12/31/2012
YES
$28,660
8
$6,007,014
$6,035,674
$10,858,123
$12,863,803
2008-2009 - No Action at this time
Construction of Energy Efficient Homes
Income Tax Credit/ Exemption
68 O.S. § 2357.46
YES
$3,153,539
171
$3,153,539
$5,693,426
$4,789,000
Investment/New Jobs Income Tax Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.4
$1,881,000
284
$1,881,000
$49,486,910
$124,707,650
2005 Report
Small Employer Quality Jobs Program
Cash Payment
68 O.S. §§ 3901 et seq.
$1,476,767
$1,259,051
$684,297
2008 & 2010 heard presentation
Aerospace Employee Tax Credit (New 2009)
Income Tax Credit/ Exemption
$1,073,307
230
$1,073,307
$0
$0
Volunteer Firefighter Credit
Income Tax Credit/ Exemption
68 O.S. § 2358.7
$594,482
1,881
$594,482
$538,487
$520,850
Venture Capital Tax Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.7 & .8
12/31/2008
$66,421
3
$414,300
$480,721
$14,018,037
$28,010,479
2007 Report
Credit for conversion of motor vehicles to clean burning fuel
Income Tax Credit/ Exemption
$465,128
150
$465,128
$1,371,847Appendix A - Oklahoma Incentives List
Sources: OK Department of Commerce, OK Tax Commission, openbooks website and OK Insurance Dept. Effective: 4/26/2011
*This amt. is the OID credit remainder after known credits are put in their respective rows. 16
Incentive
Type
Statute/ Source
Sunset Date
Transferable
2009 OTC 511 cr
2009 OTC # of credits
2009 OID credits
Total 2009 credits taken
Total 2008 Credits Taken
Total 2007 Credits Taken
IRC Review Year/Status
Credit for Biomedical Research Contribution
Income Tax Credit/ Exemption
$306,115
837
$306,115
$439,411
Income Tax Credit for Invesment in OK Producer-owned Agriculture Processing
Income Tax Credit/ Exemption
68 O.S. § 2357.25
1/1/2010
$277,896
14
$277,896
$3,924,607
$3,040,024
2009-2010 Heard Presentation 2/11/10
Manufacturers of Small Wind Turbines Tax Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.32 B
12/31/2007
YES
$255,269
27
$255,269
$1,676,569
$876,309
Poultry Litter Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.100
12/31/2013
$179,879
77
$179,879
$305,596
$218,841
Credit for electricity generated by zero-emission facilities
Income Tax Credit/ Exemption
$169,727
7
$169,727
$2,704,400
$2,194,213
Tax Credit for Entities in the Business of Providing Childcare
Income Tax Credit/ Exemption
68 O.S. § 2357.26
1/1/2004
$111,789
46
$111,789
$249,139
$137,276
Tax Credit for Banks Participating in the OK Rural Economic Development Loan Program
Income Tax Credit/ Exemption
68 O.S. § 2370.1
$81,272
2
$81,272
$0
$6,560
Breeders of Specially Trained Canines
Income Tax Credit/ Exemption
68 O.S. § 2357.203
$79,142
15
$79,142
$222,195
$340,222
Railroad Modernization Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.104
YES
$68,947
4
$68,947
$407,902
$373,618
2008 - Decided not to explore further
Income Tax Credit for Investment in an OK Film or Music Project
Income Tax Credit/ Exemption
68 O.S. § 2357.101
$40,886
15
$40,886
$38,895
$40,947
Energy Assistance Fund Contribution Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.6
$40,334
150
$40,334
$26,691
$24,905
Small Business Admin. (SBA) Guarantee Fee Tax Credit
Income Tax Credit/ Exemption
68 O.S. §§ 2370 and 2370-1
$33,478
46
$33,478
$288,789
$293,983
Credit for wages paid to an injured employee
Income Tax Credit/ Exemption
$31,367
16
$31,367
$25,576
$31,673Appendix A - Oklahoma Incentives List
Sources: OK Department of Commerce, OK Tax Commission, openbooks website and OK Insurance Dept. Effective: 4/26/2011
*This amt. is the OID credit remainder after known credits are put in their respective rows. 17
Incentive
Type
Statute/ Source
Sunset Date
Transferable
2009 OTC 511 cr
2009 OTC # of credits
2009 OID credits
Total 2009 credits taken
Total 2008 Credits Taken
Total 2007 Credits Taken
IRC Review Year/Status
Income Tax Credit for Construction of OK Film/Music Facilities
Tourism & Film Incentive
68 O.S. § 2001 & Amending Sections 2357.35-39
$25,325
1
$25,325
$1,710
$23,000
Aerospace Employer Tax Credit (New 2009)
Income Tax Credit/ Exemption
$21,454
6
$21,454
$0
$0
Employers who provide Child Care programs
Income Tax Credit/ Exemption
68 O.S. § 2357.27
1/1/2004
$10,530
7
$10,530
$4,558
$43,518
Enterprise Zone for local development
Income Tax Credit/ Exemption
68 O.S. § 2357.81
$9,936
2
$9,936
$150
$0
Qualified Ethanol Facilities Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.66
12/31/2010
$7,946
2
$7,946
$0
$6,750
Non-stop Air Service from OK to the Coast Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.28
1/1/2006
YES
$3,380
5
$3,380
$5,979
$73,184
2008 Recommended elimination Hearing Held 12/11/08
Food Service Establishments who pay for Hep A Vaccinations for Employees
Income Tax Credit/ Exemption
68 O.S. § 2357.33
$2,902
6
$2,902
$33,076
$73,180
Computer, Data Processing, Research & Development New Jobs Income Tax Credit
Income Tax Credit/ Exemption
68 O.S. 54006
$2,000
1
$2,000
$5,705
$16,879
Dry Fire Hydrant Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.102
$1,905
3
$1,905
$8,238
$41,919
Biodiesel Production Facility Tax Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.67
12/31/2012
$1,766
4
$1,766
$2,401
$0
Qualified Recycling Facility Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.59
12/31/1999
$1,571
5
$1,571
$24,546
$6,097,152
Recycling, Reuse & Source Reduction (Hazardous Waste) Incentive
Income Tax Credit/ Exemption
27 A O.S. §§ 2-11-303 et seq.
$1,131
4
$1,131
$3,700
$1,796
Recommended elimination Hearing Held 12/11/08
Gas Usage Tax Credit for Manufacturing
Income Tax Credit/ Exemption
68 O.S. § 2357 [C]
$229
4
$229
$44,000
$0
2009 Under Review 8/27/09Appendix A - Oklahoma Incentives List
Sources: OK Department of Commerce, OK Tax Commission, openbooks website and OK Insurance Dept. Effective: 4/26/2011
*This amt. is the OID credit remainder after known credits are put in their respective rows. 18
Incentive
Type
Statute/ Source
Sunset Date
Transferable
2009 OTC 511 cr
2009 OTC # of credits
2009 OID credits
Total 2009 credits taken
Total 2008 Credits Taken
Total 2007 Credits Taken
IRC Review Year/Status
Modification Expenses for Injured Employees
Income Tax Credit/ Exemption
68 O.S. § 2357.47
$143
3
$143
$7,037
$3,237
2008 - Decided not to explore further
Oil & Gas Production Tax Credit
Income Tax Credit/ Exemption
68 O.S. § 1001
6/30/2010
$0
$11,637,000
$0
Stafford Loan Origination Fee for banks & credit unions
Income Tax Credit/ Exemption
68 O.S. § 2370.3
$0
$23,901
$306,760
5 year Local Incentive
Ad Valorem Tax Exemption
62 O.S. § 860
$0
$0
$0
2006 Report
5% Areas for Oklahoma Quality Jobs Program
Cash Payment
Commerce Dept. (405) 815-5269
$0
$0
$0
2008 Heard presentation
Advanced Degree Program
Major Finance & Assistance Program
OK State Regents (405) 225-9100
$0
$0
$0
Agricultural Commodity Processing Facility Income Tax Exemption
Income Tax Credit/ Exemption
68 O.S. § 2358 [A] [6]
$0
$0
$0
2009 Under Review 8/27/09
Aircraft Maintenance Facilities Exemption
Sales Tax Exemption
68 O.S. § 1357 [20] [28]
$0
$0
$0
Aircraft Manufacturers Exemption License
Ad Valorem Tax Exemption
3 O.S. §§ 254 & 256.2
$0
$0
$0
Aircraft Manufacturing Facility
Sales Tax Exemption
68 O.S. § 1357 [16]
$0
$0
$0
Alternative Energy Sources Tax Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.32 A
1/1/2016
YES
$0
$0
$1,211,052
Alternative Fuel Vehicle (AFV) & Refueling Infrastructure Tax Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.22
1/1/2010
$0
$0
$895,061
Basic & Applied Research & Technology Program through OCAST
Major Finance & Assistance Program
74 O.S. §§ 5060.1 et seq.
$0
$0
$0
Commercial Space Industry Credit
Income Tax Credit/ Exemption
68 O.S. § 2357.13
$0
$0
$22,712
2008 Recommended elimination Hearing Held 12/11/08
Community Development Block Grants (CDBGs)
Major Finance & Assistance Program
Commerce Dept. (405) 815.5356
$0
$0
$0
Computer Services & Data Processing
Sales Tax Exemption
68 O.S. § 1357 [21]
$0
$0
$0Appendix A - Oklahoma Incentives List
Sources: OK Department of Commerce, OK Tax Commission, openbooks website and OK Insurance Dept. Effective: 4/26/2011
*This amt. is the OID credit remainder after known credits are put in their respective rows. 19
Incentive
Type
Statute/ Source
Sunset Date
Transferable
2009 OTC 511 cr
2009 OTC # of credits
2009 OID credits
Total 2009 credits taken
Total 2008 Credits Taken
Total 2007 Credits Taken
IRC Review Year/Status
Computer Services/ Data Processing/ Telecommunications Equipment
Sales Tax Refund
68 O.S. § 54003
$0
$0
$0
Construction Materials
Sales Tax Refund
68 O.S. § 1359 [7]
$0
$0
$0
Empowerment Zone Facility Bonds - Oklahoma City
Major Finance & Assistance Program
26 U.S.C. § 1394 et seq.
$0
$0
$0
Ethanol Fuel Retailer Tax Credit
Income Tax Credit/ Exemption
68 O.S. § 500.10-1
$0
$0
$0
Excise Tax on Aircraft Sales
Sales Tax Exemption
68 O.S. §§ 6001 et seq.
$0
$0
$0
Exempt Inventory (County Assessor's Office)
Ad Valorem Tax Exemption
Art. 10, § 6A Okla. Const. & 68 O.S. § 2902.2
$0
$0
$0
2006 Report
Federal Empowerment Zone Incentive - Oklahoma City
Income Tax Credit/ Exemption
Oklahoma City only
$0
$0
$0
Foreign-trade Zones
Transportation & Distribution Benefit
Port of Muskogee, Tulsa Port of Catoosa, Will Rogers International Airport and Durant International Business Park
$0
$0
$0
General Obligation Limited Tax Bonds (GOLTBs)
Major Finance & Assistance Program
Art. 10, § 35, Oklahoma Constitution
$0
$0
$0
i2E - Turning Innovation into Enterprise
Major Finance & Assistance Program
74 O.S. §§ 5060.2 [a] [b]
$0
$0
$0
Income Tax Exemption for Interest Pd. On Bonds issued by or on Behalf of Public Agencies
Income Tax Credit/ Exemption
68 O.S. § 2358.5
$0
$0
$0
Incubator Site Tenant Tax Exemption
Income Tax Credit/ Exemption
74 O.S. § 5078
$0
$0
$0
2009 Under Review 8/27/09Appendix A - Oklahoma Incentives List
Sources: OK Department of Commerce, OK Tax Commission, openbooks website and OK Insurance Dept. Effective: 4/26/2011
*This amt. is the OID credit remainder after known credits are put in their respective rows. 20
Incentive
Type
Statute/ Source
Sunset Date
Transferable
2009 OTC 511 cr
2009 OTC # of credits
2009 OID credits
Total 2009 credits taken
Total 2008 Credits Taken
Total 2007 Credits Taken
IRC Review Year/Status
Industrial Access Roads
Transportation & Distribution Benefit
Dept. of Transportation
$0
$0
$0
International Trade Processing Center at Dept. of Commerce
Transportation & Distribution Benefit
74 O.S. § 2121 et seq.
$0
$0
$0
Job Matching through OK Employment Security Commission
Major Finance & Assistance Program
OESC (405) 557-7149
$0
$0
$0
Manufacturers Sales Tax Exemption
Sales Tax Exemption
68 O.S. §§ 1359, 1359.2 & 1364
$0
$0
$0
New Markets Tax Credits & OK State Tax Credits in conjunction w/ New Markets Tax Credit Program
Income Tax Credit/ Exemption
26 U.S.C. § 45D
$0
$0
$0
New Products Dev. Income Tax Exemption
Income Tax Credit/ Exemption
74 O.S. § 5064.7
$0
$0
$0
OK Capital Access Program
Major Finance & Assistance Program
www.ocib.org
$0
$0
$0
OK Export Finance Program
Major Finance & Assistance Program
Commerce Dept. (405) 815.5216
$0
$0
$0
OK Institute of Technology through OCAST
Major Finance & Assistance Program
74 O.S. §§ 5060.3 et seq.
$0
$0
$0
Oklahoma Film Enhancement Rebate Act at Film & Music Office
Tourism & Film Incentive
68 O.S. §§ 3621-3626
7/1/2014
$0
$0
$0
Oklahoma Finance Authorities
Major Finance & Assistance Program
74 O.S. §§ 851 et seq. & 5062.1 et seq.
$0
$0
$0
Oklahoma Opportunity Fund
No appropriations given in 2008
HB 1169
$0
$0
$0
Other Truck Registration Benefits
Transportation & Distribution Benefit
47 O.S. §§ 1101 et seq.
$0
$0
$0
Partial Unemployment Benefits Program
Major Finance & Assistance Program
OESC (405) 962-7584
$0
$0
$0Appendix A - Oklahoma Incentives List
Sources: OK Department of Commerce, OK Tax Commission, openbooks website and OK Insurance Dept. Effective: 4/26/2011
*This amt. is the OID credit remainder after known credits are put in their respective rows. 21
Incentive
Type
Statute/ Source
Sunset Date
Transferable
2009 OTC 511 cr
2009 OTC # of credits
2009 OID credits
Total 2009 credits taken
Total 2008 Credits Taken
Total 2007 Credits Taken
IRC Review Year/Status
Private Activity Bond Allocation
Major Finance & Assistance Program
62 O.S. §§ 695.23 et seq.
$0
$0
$0
Public Trust Financing: Industrial Revenue Bonds
Major Finance & Assistance Program
60 O.S. § 176 et seq., 74 O.S. § 851 et seq., & 61 O.S. § 651 et seq.
$0
$0
$0
Quality Jobs Investment Program
Major Finance & Assistance Program
74 O.S. § 5062.8A
$0
$0
$0
Rural Economic Development Loan Program
Major Finance & Assistance Program
62 O.S. §§ 90.1 - 90.9 & 68 O.S. § 2370
$0
$0
$0
Sales Tax Financing
Major Finance & Assistance Program
68 O.S. §§ 1370 & 2701
$0
$0
$0
Sales/Income Tax Credit for Tourism Attraction Projects
Income Tax Credit/ Exemption
68 O.S. §§ 2357.34-40
$0
$0
$0
Small Business Linked Deposit Program
Major Finance & Assistance Program
62 O.S. §§ 88.1A et seq.
$0
$0
$0
Small Business Loan Guarantees
Major Finance & Assistance Program
15 U.S.C. § 632 et seq.
$0
$0
$0
Space Transport Vehicle Provider
Income Tax Credit/ Exemption
68 O.S. § 2357.42
1/1/2007
YES
$0
$0
$3,818,502
2008 Held Hearing & recommended elimination of
Spaceport
Sales Tax Exemption
68 O.S. § 1356 [32-37]
$0
$0
$0
State Decision
Ad Valorem Tax Exemption
68 O.S. § 2902
$0
$0
$0
Tax Incentives on Former Indian Reservation Lands
Income Tax Credit/ Exemption
26 I.R.C. §§ 45A, 168 (j) & 68 O.S. § 2358 [17]
12/31/2009
$0
$0
$0
Tax Increment Financing (TIF)
Major Finance & Assistance Program
62 O.S. §§ 850 et seq.
$0
$0
$0
2006 Report
Technology Partnership Assistance
Major Finance & Assistance Program
70 O.S. §§ 3206.3 & Art. 10 §§ 14 & 15 of Oklahoma Constitution
$0
$0
$0Appendix A - Oklahoma Incentives List
Sources: OK Department of Commerce, OK Tax Commission, openbooks website and OK Insurance Dept. Effective: 4/26/2011
*This amt. is the OID credit remainder after known credits are put in their respective rows. 22
Incentive
Type
Statute/ Source
Sunset Date
Transferable
2009 OTC 511 cr
2009 OTC # of credits
2009 OID credits
Total 2009 credits taken
Total 2008 Credits Taken
Total 2007 Credits Taken
IRC Review Year/Status
Technology Transfer Income Tax Exemption
Income Tax Credit/ Exemption
68 O.S. § 2358 [C}
$0
$0
$0
Telecommunications
Sales Tax Exemption
68 O.S. §§ 1354 & 1357 [18] [26]
$0
$0
$0
Training for Industry Program (TIP)
Employee Training through Career Techs
$0
$0
$0
Truck Registration Benefit
Transportation & Distribution Benefit
Corporation Commission (405) 521-3246
$0
$0
$0
Venture Capital Investment Board/Access Program run by Oklahoma Capital Investment Board (OCIB)
Major Finance & Assistance Program
74 O.S. § 5085.1
$0
$0
$0
Welfare-to-Work Tax Credit (WTW)
Income Tax Credit/ Exemption
Fed. Through OESC
$0
$0
$0
Work Opportunity Tax Credit Program (WOTC)
Income Tax Credit/ Exemption
Fed. Through OESC
$0
$0
$0
Workforce Investment Act
Major Finance & Assistance Program
Commerce Dept (405) 815-5206
$0
$0
$0
Totals
$28,083,598
5,634
$64,592,027
$92,675,625
$295,105,799
$354,113,985Appendix B Quality Job Type Programs 4/26/2011
Source: C2ER.org Incentive Database 23
Type
Overview NOTE: This list does not show availability of funds. Other funding updates, stipulations and policies may be in effect.
OK
Oklahoma Department of Commerce
Quality Jobs Program
Tax refund or rebate
This innovative program gives qualifying enrolled companies quarterly cash rebates of up to five percent (5%) of taxable wages for up to 10 years. New legislation in 2005 allows companies in the program who expand again to receive up to 6% wage rebates based on meeting certain criteria.
AR
Arkansas Department of Economic Development
Create Rebate Program
Tax refund or rebate
Under terms negotiated by the Arkansas Department of Economic Development, this program provides businesses a financial rebate from 3.9 to 5 percent of the annual payroll of the new, full-time, permanent employees. The financial incentive is 3.9 percent in Tier 1 counties, 4.25 percent in Tier 2 counties, 4.5 percent in Tier 3 counties and 5 percent in Tier 4 counties.
Offered at the discretion of the director of the Arkansas Economic Development Commission. Businesses that qualify as "targeted businesses" may qualify for three special incentives designed to help new, knowledge-based businesses in their early years. These discretionary incentives are for start-up companies in emerging sectors:
* A refund of sales and use taxes paid on the purchase of building materials and machinery and equipment associated with the approved project
* A transferable income tax credit equal to 10% of payroll for up to five years
* A transferable income tax equal to 33% of eligible research and development expenditures
AR
Arkansas Department of Economic Development
Advantage Arkansas (Income Tax Credit)
Tax credit
Advantage Arkansas provides a credit on state income tax equal to between 1 percent and 4 percent of new payroll for five years, depending on the tier of the county in which the business locates.
CO
Colorado Office of Economic Development & International Trade
Job Creation Performance Incentive Fund (PIF)
Funding Not available at this time
The Job Creation Performance Incentive Fund (PIF) provides a performance-based incentive payment to qualifying companies that have created net new full-time permanent jobs (jobs) paying above average wages.
CO
Colorado Office of Economic Development & Intl Trade
Job Growth Incentive Tax Credit
Tax credit
Businesses that create at least 20 net new full time jobs (or five net new jobs in an Enhanced Rural Enterprise zone) with an average yearly wage of at least 110% of the county average wage rate where the business is located may deduct up to 50% of the FICA paid by the business as a credit against state income taxes.
KS
Kansas Department of Revenue
Business and Job Development Credit
Tax credit
The business and job development credit is allowed as a direct tax credit against the income tax of any Kansas taxpayer if: an investment in a qualified business facility is made, and; at least two qualified business facility employees are hired as a direct result of that investment.
KS
Kansas Department of Commerce
Promoting Employment Across Kansas (PEAK)
Grant
New! Promoting Employment Across Kansas (PEAK) – This program offers qualified companies that are relocating operations to Kansas the ability to retain 95 percent of their payroll withholding tax for a period of five to seven years. Companies need to create at least ten new jobs within two years in metropolitan areas or five new jobs within two years in all other counties of the state. High-impact projects that create 100 new jobs within five years can retain 95 percent of payroll withholding tax for seven to 10 years. The number of years that withholding tax can be retained depends on how much the annual average wage of the relocated jobs at the Kansas worksite will exceed the county average wage.
Quality Jobs Type Program
AR
Arkansas Department of Economic Development
Targeted Businesses Incentives
Tax creditAppendix B Quality Job Type Programs 4/26/2011
Source: C2ER.org Incentive Database 24
Type
Overview NOTE: This list does not show availability of funds. Other funding updates, stipulations and policies may be in effect.
LA
Louisiana Department of Economic Development
Quality Jobs Program
Tax credit, Tax refund or rebate
The Quality Jobs Program provides cash rebates as an incentive to encourage businesses to locate or expand existing operations in Louisiana, to create quality jobs, and to promote economic development by focusing on Louisiana Vision 2020’s traditional and seed clusters. This program provides 5% or 6% cash rebate of annual gross payroll for new direct jobs for up to 10 years. It also allows for 4% sales/use tax rebate on capital expenditures; or 1.5% investment tax credit for qualified expenses.
For “Small/Expanding” businesses, the benefit of the program is the retention of the state withholding tax of the new jobs.
For “Technology” and “High Impact” businesses, the benefits of the program are:
the retention of the state withholding tax of the new jobs
state tax credits, which are refundable, transferable and/or saleable.
The program benefits are based on a percentage of the payroll of the new jobs.
The program benefits are not provided until the minimum new job threshold is met and the company meets the average wage and health insurance requirements.
This tax credit can be applied to Chapter 143 (state income tax, excluding withholding tax) and Chapter 148 (financial institutions tax).
Tax credits must be claimed within one year of the close of the taxable year that they were issued.
Tax credits can only be applied to tax liability for the year in which they were earned.
Any unused balance is refundable. The credits may also be transferred, sold or assigned.
NM
New Mexico Taxation and Revenue Department
High Wage Jobs Tax Credit
Tax credit
A credit equal to 10% of the wages and benefits paid for each new economic-base job created that: a. Pays at least $28,000/year in a community with a population of less than 40,000 or in the unincorporated area of a county b. Pays at least $40,000/year in a community with a population of 40,000.
TX
Nothing comparable to other states
Quality Jobs Type Program
MO
Missouri Dept. of Economic Development
Missouri Quality Jobs Program
Tax creditAppendix B Quality Job Type Programs 4/26/2011
Source: C2ER.org Incentive Database 25
State
Closing Fund
Source
OK
Yes - Not currently used
http://www.okcommerce.gov/Site-Selection/Incentives/Opportunity-Fund
AR
Yes - Active
http://governor.arkansas.gov/newsroom/index.php?do:newsDetail=1&news_id=694
CO
Doesn't appear to currently be available.
KS
Yes - Doesn't appear to currently be used
http://www.kansasinc.org/pubs/working/ContingencyFundAtt2.28.09.pdf
LA
Doesn't appear to currently be available.
http://www.la-par.org/Publications/PDF/dealclose.pdf
MO
None found
NM
Yes, but doesn't appear to be available for current use.
http://www.tlc.state.tx.us/pubspol/dealclosing.pdf
TX
Yes - Active
http://www.tlc.state.tx.us/pubspol/dealclosing.pdf
Opportunity Fund (In 2002 Louisiana looked into this program, but it doesn't appear it was ever implemented.)
Invest New Mexico - ($220 million annually) Could not find evidence of current use.
Texas Enterprise Fund - Funding $295 million (biennial). Governor, lieutenant governor and speaker approve.
Description - NOTE: This list does not show availability or use of funds. Additional state funding, stipulations and policies may be in effect.
Opportunity Fund - There is currently minimal funding available.
Governor's Quick Action Closing Fund (2007) - Arkansas Governor appears to use this fund, but to exactly what extent is not known.
Colorado Economic Development Fund. Could not find evidence of current use.
Contingency FundAppendix C
Notes on the Quality Jobs Program
In the following discussion, the emphasis is on the very basic principles underlying the Quality Jobs Program and its progeny, the Small Employer Quality Jobs Program and the 21st Century Quality Jobs Program. There are additional detailed requirements such as the specification of minimum gross payroll, minimum wage levels, and industries and locations with special eligibility requirements and benefit conditions. These are set forth in the Oklahoma Department of Commerce's "2011 Oklahoma Business Incentives and Tax Information Guide" available on the department's web site and 68-3601 et seq. of the Oklahoma Statutes.
The original economic development incentive created by the 1993 Oklahoma Quality Jobs Program Act is by far the most significant of the three programs described above. The Small Employer program accounted for around $1.5 million of incentive payments in FY2009 while the Quality Jobs Program paid $59.1 million. The 21st Century program for very high wage establishments is currently in the process of being implemented.
The state government funds these programs by having the Oklahoma Tax Commission take the necessary tax receipts "off the top" before recording tax receipts for regular government purposes. By not relying on regular legislative appropriations or on a predetermined set-aside for funding the payments, there is never any question as to whether establishments participating in the incentive program will receive their quarterly payments. This procedure also apparently exempts the Quality Jobs Program from being reported as part of the Oklahoma Tax Commission's comprehensive reports on "tax expenditures."
Rather than relying on the annual appropriations process, oversight of the program is achieved by requiring the Oklahoma Department of Commerce to prepare a triennial report to the Governor and to the leaders of the state's two legislative bodies. These reports are supposed to contain a fiscal analysis of the costs and benefits of the program to the state. The latest triennial report dated March 2011 does not contain such a specific fiscal analysis. However, it is emphasized herein that a technical analysis of costs and benefits to state government is an explicit component of the procedure by which many of the applying establishments are judged to be eligible to receive the incentive payments. Critical to this eligibility is the relationship between "direct state benefits" and "direct state costs."
The Direct State Benefits refer to increased revenues to state government as a result of the additional employees hired under the program. Additional income to the state is from two principal sources: (1) direct additional income tax receipts, and (2) direct additional consumption tax receipts. Data are collected for a moving average of jobs per quarter, payroll each quarter, and an estimate of average wage per employee net of fringe benefits. Tax revenue per new employee is higher to the extent that income per worker is higher.
Note that these direct benefits apply only to the new state revenues generated by the new hires. As a general rule, an establishment is eligible for the Oklahoma Quality Jobs Program if it is involved in manufacturing or activity generating at least 75 percent of sales outside of the state of Oklahoma. These are "basic" industries for which the hiring of new employees generates additional spending and new jobs elsewhere in the state as the establishments purchase inputs from other Oklahoma establishments, and also generates revenue and new jobs to enterprises selling goods and services to the new employees. All this activity generates additional revenues to the state government well beyond the direct benefits of the initial new jobs. This means that there is an inherent tendency for the Quality Jobs Program to underestimate true total benefits.
26 The additional new employment also generates Direct State Costs to government when workers move into Oklahoma from other jurisdictions. The share of new jobs going to persons migrating into Oklahoma is estimated for each new Quality Jobs contract based on population trends, wages, industry, and geography applicable to the firm in question.
Costs are then estimated using statewide averages for the individuals and families predicted to migrate into the state. In 2010, for example, it was assumed that new common school costs per student were $2,573; costs for health, safety, and transport were $562 per person; and general government costs were $309 per person. As the calculations make clear, it is less costly to the state for the new Quality Jobs to be filled by existing state residents rather than migrants from elsewhere.
Benefit cost analysis for the program continues with the calculation of Net Direct State Benefits which is Direct State Benefits – Direct State Costs.
A Net Benefit Rate is then calculated as the Net Direct State Benefits as a percentage of the Gross Payroll which the establishment is committed to pay its new workers. Other things being equal, an establishment's net benefit rate will be greater, the fewer new workers it hires from out-of-state.
The Quarterly Incentive Payment to the participating enterprises is then calculated by multiplying the Actual Gross Payroll received by the new workers by the Net Benefit Rate.
The statute states, generally, that the net benefit rate used for calculating the incentive payment is 5 percent or less and cannot exceed 5 percent. The principal exception is a net benefit rate fixed at 5 percent for firms locating in areas of the state subject to economic stress. Such areas include "opportunity zones" which are census tracts in which 30 percent or more of the population is living with incomes below the official poverty level, and entire counties with per capita incomes 85 percent or less than the statwide average, population decreases over the past 10 years, or with relatively high unemployment rates.
The above discussion suggests the likelihood that, for the entire program, it is unlikely that the cost to the state would exceed the net direct state benefits as defined above. There are bound to be some participants automatically classified to receive payments based on a net benefit rate of 5 percent that have actual net benefit rates below 5 percent; there are also firms—particularly those with wage levels in excess of $50,000 for which net benefit rates exceed the applicable 5 percent maximum. Thus the Quality Jobs Act Program appears likely to be consistent with the first principle for evaluating incentives used herein by the Incentive Review Committee, i.e., that the costs of the incentive system should be less than the benefits. In fact, between the Act's passage in 1993 and 2000, it was certain that benefits to the state exceeded costs. The 2000 session of the Oklahoma legislature added the mandatory 5 percent benefit for troubled geographic areas.
There are several other considerations worthy of note concerning the assessment of the Quality Jobs Program. From its beginning in 1993, the initiative has been judged favorably by professionals in the field of economic development. Illustrative is the following quotation from the Oklahoma Department of Commerce's 2002 triennial report on the program to the governor and the legislative leadership.
“By most any measure, the Quality Jobs Program has been a success. Created at a time when the State's economy needed a boost in terms of recognition and employment growth, the program became a leading-edge incentive among states. If imitation is the sincerest form of flattery, Oklahoma can feel proud of the fact that so many states have followed suit and patterned programs after ours.”
27 Appendix B to the current Incentive Review Committee Report presents a selected overview of quality jobs type programs in states surrounding Oklahoma.
Finally, there are two nagging questions that always arise in the evaluation of government financed economic development incentives. The first relates to competitive reactions of existing enterprises. The second, and more fundamental question, involves whether the decision to locate or expand was caused or influenced by the incentive.
First, it is possible that the firms receiving the incentive payments are willing and able to pay higher wage rates and bid workers away from older well-established local firms. The same sort of problem could exist when a firm receiving the Quality Jobs Payments is competing directly for markets with other Oklahoma firms not participating in the program. It can be assumed that if this local impact were a significant feature, there would be a significant level of related public discourse. Such does not appear to be the case.
A second nagging question always emerges. Would the establishments participating in the Quality Jobs Program have located or expanded in Oklahoma anyway—hiring new workers with the same intensity without the program at all? There is plenty of anecdotal evidence from economic development practitioners as to the program's effectiveness. Yet there are features that suggest that the program is not always the cause for new jobs.
In FY 2009, the Oklahoma Department of Commerce's triennial report indicates that new participants included 3 startups, 3 new establishments, and 25 that were expanding. That means that 25 of the 31 new enrollees had already made past decisions to locate in Oklahoma. In some cases, no doubt, these past locational decisions determined where future expansions will occur.
Along the same line of reasoning, it is interesting to note firms that received in excess of $1 million in cash payments in FY 2010 as reported by the Oklahoma Tax Commission.
Boeing Aerospace Operations $ 1,343,792
Chesapeake Energy Corp. 2,234,877
Conoco Phillips 2,149,041
Dell Marketing and Dell USA 3,710,241
Devon Energy 1,505,400
Farmers Insurance Group 1,148,255
SandRidge Operating Company 3,356,941
Spirit Aerosystems 2,401,440
Sprint Spectrum LP/ T Buschert 1,710,998
The Prof Basketball Club LLC 5,281,778
Wal-Mart Stores East LP 1,437,583
Zeledyne LLC 1,226,928
All of the 143 FY2010 recipients of Quality Jobs Program payments are listed in Appendix D. Total payments for FY 2010 were $54,011,640.
Economic developers "pulled out all the stops" to attract Dell to its current facility in Oklahoma City. Given the amount of the Quality Jobs payment, there can be little doubt of the program's importance in that locational decision. Boeing appears committed to continue expanding at the Tinker AFB development complex. Aerospace is a major focus of the state's economic development efforts. For the energy companies, it is possible that their ties to Oklahoma are so great that the locations of their employment expansions are relatively inflexible. However, it is important to remember how many major energy companies have shifted their headquarters to Houston.
Source: Larkin Warner 28 29
NAME
A G EQUIPMENT CO
3401 W ALBANY
BROKEN ARROW
OK
74012
$356,801.27
ABB INC
7051 INDUSTRIAL BLVD
BARTLESVILLE
OK
74006
$299,311.99
ADFITECH INC
3001 TECHNOLOGY DRIVE
EDMOND
OK
73013
$402,518.24
ADVANCE FOOD CO #1 & #3
201 S RALEIGH RD
ENID
OK
73701
$340,014.30
ADVANCED FINANCIAL SOLUTIONS 1
1200 SOVEREIGN ROW
OKLAHOMA CITY
OK
73108
$120,286.49
AEGIS FOOD TEST LABS OKLA LLC
3532 SW 2ND ST BLDG D
OKLAHOMA CITY
OK
73108
$2,121.28
AFFINIA PRODUCTS CORP LLC
5500 S HATTIE AVE
OKLAHOMA CITY
OK
73129
$174,935.28
ALBON MFG LLC
2801 TECHNOLOGY PL
NORMAN
OK
73071
$8,504.05
ALL STATE TANK MFG LLC
511 INDUSTRIAL PARK RD A
GROVE
OK
74344
$65,246.99
ALLTRA CORP
1600 PARTRIDGE RD
DEWEY
OK
74029
$21,804.07
AMERI-TI INC
5785 BIRD CREED AVE
CATOOSA
OK
74015
$28,158.65
AMERICAN BANKERS INSURANCE CO
6501 W GORE
LAWTON
OK
73505
$619,929.16
AMERICAN CANCER SOCIETY INC
1599 CLIFTON RD NE
ATLANTA
GA
30329
$301,228.98
AMERICAN CASTINGS LLC
PO BOX 69
PRYOR
OK
74362
$325,350.34
AMERICAN WOODMARK CORP
3102 SHAWNEE DR
WINCHESTER
VA
22601
$61,205.45
ARINC INC #2
6400 S E 59TH ST
OKLAHOMA CITY
OK
73135
$287,346.24
ARKANSAS BOX LLC
#1 ARCHERY LANE
POCOLA
OK
74902
$39,126.70
AUTO-TURN MFG INC
9800 S 219TH EAST AVE
BROKEN ARROW
OK
74014
$3,066.22
AXH AIR-COOLERS LLC
401 E LOWRY RD
CLAREMORE
OK
74017
$499,994.48
BALON CORP
3256 S HATTIE AVE
OKLAHOMA CITY
OK
73129
$113,172.45
BAMA COMPANIES INC #1
2745 E 11TH ST
TULSA
OK
74159
$413,345.08
BANK OF OKLAHOMA NA
PO BOX 2300
TULSA
OK
74192
$242,290.50
BOEING AEROSPACE OPERATIONS
8120 MID AMERICA BLVD STE 300
OKLAHOMA CITY
OK
73135
$1,343,791.84
CALLIDUS TECHNOLOGIES LLC
7130 S LEWIS AVE #335
TULSA
OK
74136
$333,576.96
CAMERON TECHNOLOGIES US INC
14450 JFK BLVD
HOUSTON
TX
77032
$264,792.95
CAPITAL ONE AUTO FINANCE INC
15000 CAP ONE DR/12077-0270
RICHMOND
VA
23238
$407,971.92
CARDINAL FG CO
775 PRAIRIE CTR DR STE 200
EDEN PRAIRIE
MN
55344
$455,034.30
CASECO MANUFACTURING INC
19105 S HWY 66
CLAREMORE
OK
74017
$37,524.06
CCA OF TENNESSEE LLC
10 BURTON HILLS BLVD
NASHVILLE
TN
37215
$59,824.92
CHART COOLER SERV CO INC
5500 E INDEPENDENCE
TULSA
OK
74115
$185,436.01
CHESAPEAKE OPERATING INC #2
6100 N WESTERN AVE
OKLAHOMA CITY
OK
73118
$2,234,876.89
CLIMATE CRAFT INC #2
518 N INDIANA AVE
OKLAHOMA CITY
OK
73106
$109,260.75
CLIMATE MASTER INC
7300 SW 44TH ST
OKLAHOMA CITY
OK
73179
$196,080.94
CNI ADMINISTRATION SERVICES
2600 JOHN SAXON RD
NORMAN
OK
73071
$276,553.78
COCA-COLA ENTERPRISES INC
2500 WINDY RIDGE PKWY STE 700
ATLANTA
GA
30339
$498,511.25
CONOCOPHILLIPS CO
1490 H PLAZA OFFICE BLDG
BARTLESVILLE
OK
74006
$2,149,041.41
COUGAR TOOL AMERICAS INC
9505 W RENO AVE
OKLAHOMA CITY
OK
73127
$28,515.73
D&L MANUFACTURING INC
1915 S 49TH W AVE
TULSA
OK
74107
$59,417.25
DAL-ITALIA LLC
PO BOX 12069
CALHOUN
GA
30703
$785,087.63
DELL MKTG LP OBO DELL USA LP
PO BOX 676021
DALLAS
TX
75267
$2,396,758.53
DELL USA LP #2
PO BOX 676021
DALLAS
TX
75267
$1,313,482.14
DELOITTE CONSULTING LLP
100 KIMBALL DR
PARSIPPANY
NJ
07054
$137,808.61
DEVON ENERGY PROD CO LP #2
20 N BROADWAY
OKLAHOMA CITY
OK
73102
$1,505,399.77
DIRECTV CUSTOMER SERVICES INC
PO BOX 915 RE/R08/N366
EL SEGUNDO
CA
90245
$764,537.59
DMI INDUSTRIES INC
15300 TIGER SWITCH RD
TULSA
OK
73116
$336,344.48
DOLGENCORP LLC #2
401 GENERAL DRIVE
ARDMORE
OK
73401
$220,982.34
DOLLAR TREE DISTRIBUTION INC
500 VOLVO PARKWAY
CHESAPEAKE
VA
23320
$201,394.27
DOT FOODS INC
RT 99 SOUTH
MT STERLING
IL
62353
$251,299.37
EAGLE SUSPENSIONS INC
1811 W ARKANSAS ST
DURANT
OK
74701
$200,714.48
ENVIRO SYSTEMS INC
40000 HWY 99 N
SEMINOLE
OK
74868
$86,164.48
EXTERRAN ENERGY SOL LP #2
20602 E 81ST ST
BROKEN ARROW
OK
74014
$43,247.58
FARMERS INSURANCE GROUP
4680 WILSHIRE BLVD
LOS ANGELES
CA
90010
$1,148,255.00
FLIGHT SAFETY INTERNATIONL INC
2700 N HEMLOCK CIRCLE
BROKEN ARROW
OK
74012
$74,707.27
GARVER ENGINEERS LLC
10015 E 51ST ST
TULSA
OK
74146
$30,627.57
GCOE LLC
7950 JONES BRANCH DR
MCLEAN
VA
22107
$92,414.11
GEA RAINEY CORP
5202 W CHANNEL RD / P OSTEN HR
CATOOSA
OK
74015
$117,838.58
GMX RESOURCES INC
9400 N BROADWAY STE 600
OKLAHOMA CITY
OK
73114
$116,447.16
OKLAHOMA TAX COMMISSION
QUALITY JOBS INCENTIVE PAYMENT REPORT FY1030
GORDON BROS SUPPLY INC
5498 HWY 66 W
STROUD
OK
74079
$33,775.58
HALLIBURTON ENERGY SERV INC #2
1015 BOIS D'ARC AVE
DUNCAN
OK
73536
$66,863.37
HARSCO CORP
5215 ARKANSAS RD
CATOOSA
OK
74015
$15,023.13
HARTFORD FINANCIAL SERV GROUP
200 EXECUTIVE BLVD
SOUTHINGTON
CT
6489
$177,168.88
HUBER ENGINEERED WOODS LLC
PO BOX 1250
BROKEN BOW
OK
74728
$159,589.93
HYATT SHARED SERV CENTER LLC
830 CITY AVE
MOORE
OK
73160
$332,050.14
I C BUS OF OKLA LLC #2
2232 N MINGO RD
TULSA
OK
74116
$2,066.13
IC BUS OF OKLA LLC #1
2322 N MINGO RD
TULSA
OK
74116
$374,575.58
ICON CONSTRUCTION INC
9909 W UNIVERSITY DR STE 510
MCKINNEY
TX
75071
$45,805.23
IMATION ENTERPRISES CORP
1 IMATION PL
OAKDALE
MN
55128
$114,704.14
IMTEC IMAGING LLC
2401 N COMMERCE
ARDMORE
OK
73401
$49,746.23
INTERNATIONAL BUS MACH 3 & 4
1301 K ST NW STE 1200W
WASHINGTON
DC
20005
$319,888.38
INTERNATIONAL INS BROKERS LTD
303 REUNION CENTER 9 E 4TH ST
TULSA
OK
74103
$130,939.16
JASCO PRODUCTS CO LLC
311 NW 122ND
OKLAHOMA CITY
OK
73114
$257,260.06
JOHN ZINK CO LLC
11920 E APACHE
TULSA
OK
74116
$54,070.54
KANBAR PROPETY MGMT LLC
15 E 15TH ST STE 2700
TULSA
OK
74103
$87,600.51
KEMPER VALVE & FITTINGS CORP
PO BOX 400
WAUCONDA
IL
60084
$14,222.03
KIRKWOOD METAL SERVICES LLC
3153 N LEWIS AVE
TULSA
OK
74110
$19,125.15
LAREDO PETROLEUM INC
15 W 6TH ST STE 1800
TULSA
OK
74119
$344,742.96
LEVEL 3 COMMUNICATIONS LLC #2
1025 ELDORADO BLVD
BROOMFIELD
CO
80021
$283,503.89
M & M ENGINEERED PRODUCTS LLC
522 N ASH ST
NOWATA
OK
74048
$9,562.28
MAGELLAN MIDSTREAM HOLD GP LLC
ONE WILLIAMS CENTER MD 28-8
TULSA
OK
74172
$922,228.12
METCRAFT INC
P903 E 104TH ST STE 130
KANSAS CITY
MO
64131
$8,055.48
MID AMERICAN STL & WIRE LLC #2
PO BOX 296
MADILL
OK
73446
$79,638.71
MID AMERICAN STL & WRE LLC #1
799 HWY 70 S
MADILL
OK
73446
$183,299.07
MIDCO FABRICATORS INC
PO BOX 1711
GAINESVILLE
TX
76241
$69,674.12
NATIONAL STEAK PROCESSORS #2
301 E 5TH
OWASSO
OK
74055
$124,547.03
NEWFIELD EXPL MID-CONTINENT IN
ONE WILLIAMS CTR STE 1900
TULSA
OK
74172
$57,619.14
NORTH AMERICAN PETRO CORP USA
1335 W CAUSEWAY APPROACH
MANDEVILLE
LA
70471
$32,439.35
OCEAN DENTAL CORP OFFICE INC
206 W 6TH AVE
STILLWATER
OK
74074
$24,870.79
OFFICE MAX INC #1
150 E PIERCE RD
ITASCA
IL
60143
$468,740.48
OFFICE MAX INC #2
150 E PIERCE RD
ITASCA
IL
60143
$470.32
OKLA DEPT OF COMMERCE
6601 BROADWAY EXT STE 200
OKLAHOMA CITY
OK
73116
$16,000.00
ORTHOCARE INNOVATIONS LLC
800 RESEARCH PKWAY STE 310
OKLAHOMA CITY
OK
73104
$48,423.92
PACCAR INC #2
750 HOUSER WAY NORTH
RENTON
WA
98055
$2,823.54
PAETEC COMMUNICATIONS INC
400 WILLOWBROOK OFFICE PARK
FAIRPORT
NY
14450
$465,519.07
PELCO STRUCTURAL LLC
1501 INDUSTRIAL BLVD
CLAREMORE
OK
74017
$207,219.64
PETRA INDUSTRIES INC
2101 S KELLEY AVE
EDMOND
OK
73013
$66,167.24
PLIANT CORP
1 EDISON DR
MCALESTER
OK
74502
$4,838.58
POWER COSTS INC
3550 W ROBINSON STE 200
NORMAN
OK
73072
$171,246.60
PRIMARY NATURAL RES III LLC
7134 S YALE STE 430
TULSA
OK
74136
$2,787.00
PRYOR CHEMICAL CO
16 S PENNSYLVANIA
OKLAHOMA CITY
OK
73107
$221,954.27
QUARTER TURN RESOURCES INC
3505 W NORTH AVE
PONCA CITY
OK
74601
$59,768.35
QUESTAR EXPLOR & PROD CO
PO BOX 45601
SALT LAKE CITY
UT
84145
$243,990.99
RUHRPUMPEN INC
4501 S 86TH ST EAST AVE
TULSA
OK
74145
$167,625.83
SAMSON INVESTMENT CO #2
TWO WEST SECOND ST
TULSA
OK
74103
$139,119.80
SAMSON RESOURCES CO #2
TWO WEST SECOND
TULSA
OK
74103
$409,249.82
SAMSON RESOURCES CO #3
2 W 2ND ST SAMSON PLAZA
TULSA
OK
74103
$39,102.53
SANDRIDGE OPERATING CO
PO BOX 548807
OKLAHOMA CITY
OK
73154
$3,356,940.99
SELECT ENGINEERING INC
1717 S BOULDER STE 600
TULSA
OK
74119
$44,420.53
SERVICE KING MFG INC
PO BOX 158
STROUD
OK
74079
$232,233.26
SGS NORTH AMERICA INC
PO BOX 548
BARTLESVILLE
OK
74005
$340,410.53
SHAW TULSA FABRICATORS INC #2
4171 ESSEN LANE
BATON ROUGE
LA
70809
$763,627.70
SIGMA PROCESSED MEATS INC
701 E GOODHOPE RD
SEMINOLE
OK
74868
$291,362.61
SIMONTON BUILDING PROD INC
1 COCHRANE AVE
PENNSBORO
WV
26415
$172,913.16
SITEL OPERATING CORP #1
3102 W END AVE STE 900
NASHVILLE
TN
37203
$231,112.54
SITEL OPERATING CORP #2
3102 W END AVE STE 900
NASHVILLE
TN
37203
$328,373.13
SOUTHERLAND INC
PO BOX 70129
NASHVILLE
TN
37207
$15,138.72
SPIRIT AEROSYSTEMS INC
3330 N MINGO
TULSA
OK
74158
$2,401,439.81
SPRINT SPECTRUM LP/T BUSCHERT
7900 COLLEGE BLVD
OVERLAND PK
KS
66210
$1,710,997.64
STAR-TEK USA
111 HAVANA ST
AURORA
CO
80010
$236,057.86
STATE INCOME TAX OBO DURANT DC
300 PHILLIPI RD
COLUMBUS
OH
43228
$472,102.6131
STONEHENGE PARTNERS INC
401 S BOSTON AVE STE 400
TULSA
OK
74103
$10,335.22
SVC MANUFACTURING INC
3500 MAIN ST MAIP
PRYOR
OK
74361
$187,253.45
T D WILLIAMSON INC
5727 S LEWIS AVE STE 300
TULSA
OK
74105
$146,747.34
TECHNOLOGY DEVELOPMENT GRP INC
41901 WOLVERINE RD
SHAWNEE
OK
74804
$490.77
THE CROSBY GROUP INC
2801 DAWSON RD
TULSA
OK
74110
$16,871.39
THE PROF BASKETBALL CLUB LLC
211 N ROBINSON 3RD FLR
OKLAHOMA CITY
OK
73102
$5,281,777.51
THERMA TRU CORPORATION
601 PAW PAW ROAD
ROLAND
OK
74954
$61,038.86
THERMAL ENGINEERING INTL USA I
2110 N INDUSTRIAL DR
SAPULPA
OK
74066
$2,326.21
TIGER TRUCK MANUFACTURING LLC
100 TIGER DR
POTEAU
OK
74953
$89,252.16
TITAN TANKS & VESSELS LLC
PO BOX 321
GAINESVILLE
TX
76241
$396,947.55
TORNADO ALLEY TURBO INC
1060 W MAIN
OKLAHOMA CITY
OK
73120
$26,853.88
TRACKER MARINE LLC
3807 TAHOE WAY
MIAMI
OK
74354
$303,939.18
TRISTAR GLASS INC
5566 S GARNETT
TULSA
OK
74146
$55,603.24
TRITON SCIENTIFIC LLC
PO BOX 1902
PONCA CITY
OK
74602
$109,641.82
TULSA COMBUSTION LLC
5416 S 49TH W AVE
TULSA
OK
74107
$27,327.57
UNIT CORP
7130 S LEWIS STE 1000
TULSA
OK
74170
$17,017.48
UNITED HEALTHCARE SERV INC
9900 BREN RD E MN008-E305
MINNETONKA
MN
55343
$362,209.86
UNITED RECOVERY SYSTEMS LP
6506 S LEWIS AVE STE 260
TULSA
OK
74136
$214,616.09
UNITED STATES CELLULAR CORP #2
4700 S GARNETT STE 100
TULSA
OK
74146
$56,960.19
VALLEY TIMBERS LC
PO BOX 129
ANTLERS
OK
74523
$36,085.81
VANGUARD CAR RENTAL USA INC
6929 N LAKEWOOD
TULSA
OK
74117
$676,264.75
VENTURA REFINING & TRANSMISSIO
301 NW 63RD ST STE 320
OKLAHOMA CITY
OK
73116
$28,417.95
VICTORY ENERGY OPER LLC
10701 E 126TH ST N
COLLINSVILLE
OK
74021
$66,327.86
WAL-MART STORES EAST LP
1301 SE 10TH ST
BENTONVILLE
AR
72716
$1,437,582.97
WEATHERNEWS AMERICA INC
350 DAVID BOREN BLVD STE 1000
NORMAN
OK
73072
$157,943.93
WELLMAN PRODUCTS LLC
1110 W TENKILLER RD
CATOOSA
OK
74015
$250,892.90
WEST BUSINESS SERV LLC #1
11808 MIRACLE HILLS DR
OMAHA
NE
68154
$650,203.03
WEST BUSINESS SERV LLC #2
11808 MIRACLE HILLS DR
OMAHA
NE
68154
$13,389.58
WILLBROS ENGINEERS (US) LLC
2087 E 71ST ST
TULSA
OK
74136
$41,424.66
WILLIAMS COMPANIES
ONE WILLIAMS COMPANY MD 48
TULSA
OK
74172
$478,133.89
YUBA HEAT TRANSFER LLC
2121 N 161ST EAST AVE
TULSA
OK
74116
$9,794.97
ZEECO INC
22151 E 91ST ST
BROKEN ARROW
OK
74014
$317,397.16
ZELEDYNE LLC
17333 FEDERAL DR STE 230
ALLEN PARK
MI
48101
$1,226,927.70
$54,011,640.39
Source: Oklahoma Tax CommissionAppendix E - Senate Bill 1267
Many Oklahoma credits available against corporate and individual income taxes will be subject to a
two-year moratorium from July 1, 2010, through June 30, 2012. The credits otherwise authorized may not be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010, for which the credits would otherwise be allowable. However, beginning July 1, 2012, the credits may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the applicable statutory provisions.
27A O.S. § 2-11-303 -Credit for Hazardous Waste Control
68 O.S. § 2357 - Gas Used in Manufacturing Credit
68 O.S. § 2357.4 - Oklahoma Investment/New Jobs Credit
68 O.S. § 2357.6 - Credit for Energy Assistance Fund Contribution
68 O.S. § 2357.11 - Coal Credit
68 O.S. § 2357.25 – Oklahoma Agricultural Producers Credit
68 O.S. § 2357.26 - Credit for Employers Providing Child Care Programs
68 O.S. § 2357.27 - Credit for Entities in the Business of Providing Child Care Services
68 O.S. § 2357.30 - Small Business Guaranty Fee Credit
68 O.S. § 2357.32A - Credit for Electricity Generated by Zero-Emission Facilities
68 O.S. § 2357.32B - Credit for Manufacturers of Small Wind Turbines
68 O.S. § 2357.33 - Credit for Food Service Establishments that Pay for Hepatitis A Vaccination for their Employees
68 O.S. § 2357.41 - Credit for Qualified Rehabilitation Expenditures
68 O.S. § 2357.46 - Credit for the Construction of Energy Efficient Homes
68 O.S. § 2357.47 - Credit for Modification Expenses Paid for an Injured Employee & Credit for Wages Paid to an Injured Employee
68 O.S. § 2357.59 - Credit for Qualified Recycling Facility
68 O.S. § 2357.66 - Credit for Qualified Ethanol Facilities
68 O.S. § 2357.67 - Credit for Qualified Biodiesel Facilities
68 O.S. § 2357.81 - Oklahoma Local Development and Enterprise Zone Incentive Leverage Act Credit
68 O.S. § 2357.100 - Poultry Litter Credit
68 O.S. § 2357.101 - Film or Music Project Credit
68 O.S. § 2357.102 - Dry Fire Hydrant Credit
68 O.S. § 2357.104 - Credit for Railroad Modernization
68 O.S. § 2357.203 - Credit for Breeders of Specially Trained Canines
68 O.S. §§ 2357.302 & 2357.303 - Credits for Employers in the Aerospace Sector
68 O.S. § 2357.304 - Credit for Employees in the Aerospace Sector
68 O.S. § 2370 - Credit for Financial Institutions Making Loans under the Rural Economic Development Loan Act
68 O.S. § 2370.3 - Credit for Stafford Loan Origination Fee
68 O.S. § 54006 - Research and Development New Jobs Credit
Note: See House Bill 3024 for additional amendments to some of the credits listed above.
House Bill 3024
Amends the moratorium on the Investment/New Jobs Credit found in Senate Bill 1267. The amendment provides that an Investment/New Jobs Credit can be established during the moratorium period of July 1, 2010 through June 30, 2012. The credits established during this period will accrue and may not be claimed until tax year 2012. 68 O.S. § 2357.4
Establishes a sunset date for the Credit for Investment in Qualified Electric Motor Vehicle Property. No credit will be allowed for investments in qualified electric motor vehicle property placed in service on or after July 1, 2010. 68 O.S. § 2357.22
32 Establishes a credit for the manufacturer of low-speed electric motor vehicles, medium-speed electric motor Vehicles or electric motor vehicles which are manufactured after June 30, 2010. The manufacturer must have a manufacturer exemption permit pursuant to Title 68 O.S. § 1359.2.
The credit will be as follows:
 For low-speed electric motor vehicles the credit is $500 per vehicle manufactured.
 For medium-speed electric motor vehicles the credit is $1,000 per vehicle manufactured.
 For electric motor vehicles, which are not low-speed or medium-speed vehicles, the credit is $2,000 per vehicle manufactured.
Any credit allowed but not used will have a five year carryover provision. 68 O.S. 2357.402 (new law)
Senate Bill 1590
A moratorium has been placed on the Small Business Capital Credit and the Rural Small Business Capital Credit. The moratorium shall be in effect for investments made on or after June 1, 2010 through December 31, 2011. 68 O.S. §§ 2357.62, 2357.63, 2357.73, 2357.74, 2361a (new law) & 2372a (new law)
House Bill 2519
Extends for two years the expiration date of the Coal Credit from tax years ending on or before December 31, 2012 to tax years ending on or before December 31, 2014. 68 O.S. § 2357.11
Amends the Credit for Investment in a Clean-Burning Motor Vehicle Fuel Property. The tax credit for a vehicle originally equipped, or modified, to be propelled by a hydrogen fuel cell is only available for tax year 2010. The credit for property directly related to the delivery of a hydrogen into the fuel tank of a motor vehicle or a storage tank is only available for tax year 2010. 68 O.S. § 2357.22
Amends the moratorium on the Credit for Electricity Generated by Zero-Emission Facilities found in Senate Bill 1267. Reduces the moratorium by one-year, from June 30, 2012 to June 30, 2011. The amendment also provides that the Credit for Electricity Generated by Zero-Emission Facilities can be established during the moratorium period of July 1, 2010 through June 30, 2011; however, any credits established during this period will accrue and may not be claimed until tax year 2012. 68 O.S. § 2357.32A
Amends the moratorium on the Credit for Qualified Rehabilitation Expenditures found in Senate Bill 1267. The amendment provides that Credit for Qualified Rehabilitation Expenditures can be established during the moratorium period of July 1, 2010 through June 30, 2012; however, any credits established during this period will accrue and may not be claimed until tax year 2012. 68 O.S. § 2357.41
Source: Oklahoma Tax Commission
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